Back in 1971, the average mortgage rate was around 7.33%, a little bit higher than where we're at today. If someone waited for interest rates to go down, they wouldn't have purchased a home until 1993! That person would have rented for 22 years waiting for rates to go down! The worst part is that home values quadrupled in that timeframe.

While, we're not likely to wait another 22 years for rates to dip below 7%, the days of 3% and 4% might be gone for good. The norm might be about 5.5% to 6.5%.

This could have been a market mover week for mortgage rates due to the job numbers coming out from ADP and the Bureau of Labor Statistics. If they were strong job numbers, it would have sent interest rates much higher.

The BLS report came out this morning, and this is one of the most influential reports the Fed relies upon for monetary policy. It can dictate the direction of the federal funds rate. In other words, should the Fed continue to increase rates, decrease rates, or leave them alone?

Fortunately, the job numbers aligned with market expectations, keeping the mortgage rates relatively stable, just above 7% for a highly qualified conventional borrower. These numbers come out from Mortgage News Daily, a great online resource.

FHA and VA homebuyers now can typically get a rate below 7%. An FHA loan is an attractive option because it carries lower rates, and they reduced the monthly mortgage insurance premium in May. It's a very attractive loan.

Next week could be another "hold your breath" week, because we get inflation numbers. The CPI, Consumer Price Index, comes out. It is also the last federal funds meeting of 2023. The markets are always trying to interpret each and every word that Fed Chairman, Jerome Powell, says after the meetings.

The markets are anticipating no further increase in the federal funds rate this year. Let's hope that's the case and they come down next year.

Finally, the conventional loan limit increased in Clark County to $766,550 and FHA increased to $498,257. With these increases, a first-time homebuyer could potentially purchase a home on a conventional mortgage of approximately $790,000 with 3% down. On an FHA loan, a homebuyer could potentially buy a home worth around $516,000 with 3.5% down. And on FHA, the buyer does not have to be a first-time homebuyer!


•••


Bill Gaylord, NMLS 680603 | Gaylord-Hansen Team at CrossCountry Mortgage | 858-776-6830

Rate Source: Mortgage News Daily (https://www.mortgagenewsdaily.com)

The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.

Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC. NMLS3029 NMLS1437924 NMLS858979 NMLS2079383 (www.nmlsconsumeraccess.org).

For more licensing and disclosures, visit https://www.gaylordhansen.com/licensi....