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Mortgage Update 1.13.15


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Blog by Doug Ingersoll | January 13th, 2015


From Stuart Crawford at VIP Mortgage:

We had a wild ride in the mortgage markets last week, with a lot of activity and changes.
 
Surprising to most market watchers, mortgage rates actually ended last week slightly LOWER than expected.  With the strong labor figures being released, the consensus was that rates would increase.  Although, continued concerns about the pace of global economic growth caused bond yields around the world to decline.  Mortgage rates ended at the lowest levels in over a year.

The U.S. labor market finished an impressive 2014 on a high note.  The economy added 252K jobs in December (which was a little more than expected) and upward revisions to prior months added another 50K.  For 2014, a total of 2.9 million jobs were added, the most since 1999.  The Unemployment Rate fell from 5.8% to 5.6%, the lowest since June 2008.

Despite the labor market strength, the level of wage growth in 2014 was a little disappointing.  Wages were just 1.7% higher than one year ago.  Fed officials hope to see annual wage growth of 3% to 4%, which would be in line with past economic recoveries.

The Federal Housing Administration (FHA) had a BIG ANNOUNCEMENT that beginning at the end of this month it will reduce the annual mortgage insurance premium by 0.50% on new loans.  Since MIP is calculated like an interest charge, the reduction will feel to some home buyers like mortgage rates suddenly fell by 0.50%.  This change will make home ownership more affordable for many people, especially first-time buyers.  **More details to come on this**

Stuart can be reached at 602-710-8975