Mortgage rates had a rough and tumble week since the last time we spoke. Well, at least in terms of relative history. All’s well that ends well, however, and things seem to have ended well enough for the time being. If someone didn’t read the news for the last week and then compared last week’s average rates to this week’s, they would logically assumed that nothing had happened.
Of course, quite a bit happened.
The biggest, which we alluded to last week, was the release of the August jobs report on Friday, September 2. The promise of big results, coupled with Fed Chair Janet Yellen’s borderline aggressive words in Jackson Hole a week before, had brought rates up from their comfortable lows. It was somewhat surprising then when the report revealed growth much lower than expected. Although July saw the economy crush its goal for job creation, August supplied only 151,000 when 180,000 was the expectation.
Still, even then rates stayed solid.
Turns out the rates would need at least two weak-kneed reports in order to bring rates back down to the low levels—averaging between 3.375 and 3.5 percent for a 30 year fixed-rate mortgage—that we’ve grown unusually used to in recent months.
Wednesday, September 6 brought the Institute for Supply Management’s Services data release. The numbers featured within were much lower than those anticipated, and investors ran to the relatively conservative bond market for safety. As usual, when bonds are in demand, rates go down. So it was this time as well, bringing us back down to the same ol’ lows, as mentioned above.
“Right back in the bottom of the range,” said Gus Floropoulos, vice president of The Federal Savings Bank. “It almost feels like it’s a joke, fixed, rates are staying here forever…..but we know they’re not.”
Maybe not, Gus…maybe not. But there’s a decent chance that the rates will stay in place at least throughout September. Yellen suggested that a strong August jobs report would be a strong indicator for a long-awaited rates hike. That didn’t happen.
So, until next week, enjoy the low rates.
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