Current interest rates are:
4.05% - average rate for a 30-year fixed rate mortgage
3.25% - average rate for a 15-year fixed rate mortgage
Even though reports last week showed that consumer confidence was up, an important fact in an economy that’s largely based on consumer spending, the GDP growth rate was a good deal slower than analysts expected. The mixed economic news helped keep mortgage rates from rising.
There are some very influential economic reports out this week which could cause some shifts in the mortgage market. There’s also renewed focus on inflation rates which has increased by 2%. Below is n overview of this week's important economic reports.
Monday: Consumer Inflation Report
Tuesday: Institute for Supply Management Index (Manufacturing Sentiment report)
Friday: Jobs Report
Reports out this week showed that inflation is on the rise, however, experts are saying increased energy costs is a big reason why. They are expecting to see inflation drop back down now that the price of oil has decreased. Still a rise in inflation could potentially lead to a rise in interest rates.
ISM Index dropped to 53.5 in April after being measured at 56 in March. Anything above 50 indicates growth but the drop was two points lower than expected.
Perhaps the most influential of the reports this week is the Jobs Report. Analysts had predicted that there would be around 162,000 jobs created in April, keeping the unemployment rate at around 8.2%. However, even though the unemployment rate went down to 8.1% only 115,000 new jobs were created. That's the smallest gain in the last six months.
Given the extremely low rates and inflation concerns, the Homes.org mortgage team is predicting that mortgage rates will go up next week by 2 to 3 points for 30 year fixed-rate mortgages and stay unchanged for 15 year fixed-rate mortgages.
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