Eave’s “Just the Facts” series makes a comeback as a monthly feature summarizing the major economic news over the last month that affected interest rates, alongside our projections for the future. We’re calling this feature the Monthly Mortgage Rate Roundup.
Market Interest rates climbed sharply throughout October. And as expected, mortgage rates did, too. Eave’s rates moved up by 1/8th of a point month over the month.
Throughout 2018, the US economy has been strong. Its continual improvement each month has led many economists to believe good times will soon end and that a recession is around the corner. But there still isn’t a recession in sight. The US economy added 250,000 jobs in October alone. Plus, we’ve seen continued growth in the manufacturing sector and a healthy rise in consumer spending. All of these signs point to a healthy, robust economy.
The US economy continues its steady growth, with healthy underlying metrics. While many recession-watchers continue to be confounded by the prolonged nature of the “good times” since the last recession, the Federal Reserve is reacting to how expensive things have become for the average consumer. A measure of this is called Inflation. To keep inflation under check, the Federal Reserve will likely continue to increase interest rates. This prevents the cheap cost of credit from artificially inflating prices for our day-to-day goods and services, which would have negative after-effects for the US economy.
Given that inflation is more of a worry for the Federal Reserve than the next recession, we anticipate another rate hike to hit in December, and at least one (maybe more) to hit in 2019.
What This Means for You
Not much has changed since our last roundup. It’s still a great time to buy a house! With interest rates projected to rise, those ready to buy would be smart to catch the current lower rates while they can. What’s more, market conditions are strong for those who are ready to upgrade. The luxury home market is a buyer’s market, and the starter home market is a seller’s market. If you upgrade soon, you could potentially save thousands of dollars. Even better? Fall is a great time of year both to sell and buy a home.
At Eave, we look closely at several economic data sets daily. Of course, we’re tuned into the Federal Reserve. But we look at other data points too. One thing we’re always tracking is growth or decline in the housing sector. This includes how many new homes are being built, and how many existing homes are selling. We also look at general factors driving economic growth, like the behavior of individual consumers, industries and production, and small business, amongst others. Over time, it comes easier for us to analyze patterns and trends that influence the economy.
The roundup in a nutshell: Looking at the data we have now, we expect that economic growth will remain at a steady pace and as a result, both federal and mortgages rates will climb.
You can check out Eave’s real-time rates here. We think you’ll find that they speak for themselves.