Yesterday morning, the Jobs Report was released with data for the month of October. The report gave an overall healthy picture of the economy and came in slightly stronger than expected with 161,000 jobs added in October and positive revisions made to August and September.
Wages showed an increase of $0.10 per hour for an average hourly wage of $25.92. This follows the $0.08 hourly increase in September. $0.18 per hour to your wallet may not sound like a lot to shout about…however, it’s a sign of inflation which will drive up mortgage rates off their historic low levels.
Following the Jobs Report, odds of the Fed increase the Fed funds rate at their meeting next month jumped to 76%. Although the Fed does not directly control mortgage interest rates, mortgage rates are influenced by actions the Fed takes. Just the likelihood or discussions by the Fed leaning towards a rate hike may cause mortgage rates to move higher. In addition, Thursday Freddie Mac’s PMMS revealed that mortgage rates are heading up largely due to inflation.
On Tuesday, we finally have the Presidential election. Honestly, with our candidates, it’s very hard to say how they will impact mortgage rates.
What I do know is that mortgage rates are based on mortgage backed securities (bonds) and inflation is the arch enemy of bonds. With signs of inflation, bonds will be dumped for other investments, which will cause mortgage rates to rise.
If I can help you with your refi or mortgage for the purchase of your home located anywhere in Washington state, please contact me. You can click here for a no-hassle mortgage rate quote.