Rates
Rates were pretty much flat all week, in anticipation of the Unemployment numbers, that were released today.
New jobs: 151,000 vs est. of 180,000
Unemployment 4.9% vs est. of 4.8%
Hourly wage increased 0.1% vs est. of 0.2%
These were NOT what was expected, and it has put the Federal Reserve in a very sticky situation. The Fed is needing to raise rate in order to combat the next recession. But unemployment, especially hourly wages, have not increased enough, based on what the Fed has indicated.
Federal Reserve meets at the end of the month, there are quite a few economic reports until then, but this was the biggest. At this point it is anyone’s guess, but the consensus is, that if the Fed does raise rates in September, we do NOT anticipate much of an increase on Mortgage Rates, why….
Well the US bond market is still paying significantly higher returns than foreign bond markets, as an example, the Japan bonds are all negative rates. So even if the Fed does raise the Fed Funds rate, we could still see an influx of foreign investment, thus keeping our rates low.
A great example of this was when the Fed raised rates last December, and since then mortgage rates have actually fallen to some of their lowest levels in 5 years.
We are in a neutral stance, lock them when you can, we don’t anticipate a huge increase, but on the flip side, we do not see any reason for them to go back to the 7/5/2016 lows.
Flipping a home.
Over the last couple of weeks, I have had lots of questions with regards to flipping homes and what are the restrictions for buyers and sellers, so I have created a web page you can use as a reference, I will update it as underwriting guidelines change:
Link to Flipping Web Page Here.