Eave’s “Just the Facts” is a weekly series designed to cut through the noise about home loan interest rates for borrowers and real estate professionals. Eave doesn’t try to play the role of forecaster, who claims to have some special insight. Few do! Instead, our Chief Credit Officer covers what happened in the market last week.
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Two economic data points continued the strength of economy narrative: Retail sales rose 0.5 percent in June, and May’s gain was revised up from 0.8 percent to a eye-popping 1.3 percent. The overall strong pace of retail sales growth puts the consumer on track to drive real GDP growth in Q2. Industrial production grew 0.6 percent in June to reach a new high. Capacity utilization rose but is still below its historic average, suggesting that more demand for industrial goods can be absorbed by current capacity.
However, housing starts (the number of new home construction projects started) fell 12.3 percent in June, as builders faced rising materials costs and increasing labor shortages as barriers to starting construction.
For example, the cost of lumber is at all-time highs given tariffs on imports from our neighboring countries.
Bottom line is as long as new construction remains constrained by either input costs or local regulations and poor public policies on affordable housing, the upward pressure on home prices can continue to rise in metro areas with great demand-supply imbalance. This has an independent bearing on inflation and consequently, the Fed’s interest rate policy decisions.
Our Updated Jumbo Rates * (as of 07/24/2018)
Our rates remain unchanged for yet another week.
5/1 ARM – 4.000% Interest Rate, 4.705% APR
7/1 ARM – 4.125% Interest Rate, 4.650% APR
30yr FRM – 4.500% Interest Rate, 4.573% APR
* This estimate is informational only. It is not a commitment to lend. To apply for a loan, you’ll need to complete an application and provide additional information. Final approval of your loan is based on verification of your meeting the necessary underwriting criteria and property approval. The estimates for fees and other charges are not intended to be accurate until you have chosen a property and settlement service providers. Rates are estimates. Your final rate, loan product, and terms may be different. Normal credit qualifications and other terms and conditions apply. Products, rates and terms are subject to change unless product has been selected and rate has been locked after you have chosen a property.