Interest rate volatility has continued to prevail this week. Mortgage bond prices (the driving force behind mortgage interest rates) have been up and down like a rollercoaster! Unfortunately, bonds spent more time on the downside which drives interest rates up. The biggest factors sending mortgage rates up are economic reports showing an improving economy and fears over future inflation.
The jobs report came in much better than anticipated, with only 345,000 jobs lost in May, far better than expectations of 520,000 jobs lost. Furthermore, the prior two months jobs reports were revised and reflected 82,000 fewer jobs lost than previously reported. The unemployment report was also released today showing unemployment now at 9.4%...up from 8.9% last month. The markets are giving much more weight to the jobs report over the unemployment report as the experts feel it is a better indication of what is to come in the future.
We still have a long road to economic recovery. Low mortgage rates are a key to recovery in the housing sector and the overall economic recovery process. Now is a great time to buy before rates go up!
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