Napa Mortgage News

Nervous about rising rates?

February 27th, 2017 3:10 PM by Dale DiGennaro

Dear Gena,

Or are you happy? Although mortgage rates have increased since the election, it's based on the fact that the economy is expected to get stronger, which is a good thing for all!

Stronger employment, small business environment, investing and lower taxes should translate to more money in everyone's pocket.

As long as rates stay on the lower side of historic levels as expected...and there is continued loosening of tight underwriting guidelines...the real estate market should do well.

Higher rates mean that the house you could've purchased or refinanced last summer will now cost a bit more. However, there are other ways to keep that payment manageable, and maybe even additional financing options, depending on your situation & needs.

CNBC posted a great explanation HERE!

Complete with suggestions & scenario's

VISIT OUR WEBSITE

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THINKING OF SELLING OR EVEN DOING A REFINANCE...
Our "Home Price Index" will take into consideration your original purchase price & date of home purchase to determine...

according to the appreciation rate for the region you live in...whether it is a good time for you to refinance now or....if you are getting ready to list your home...what a reasonable value for your area would be. You can also sign up to receive a quarterly report of your homes value based on the up to date analysis of your region.

Just a couple of ways that Custom Lending keeps you informed of our changing market place so you can make the best financial decisions for you and your family!

Wage Inflation Picks Up

Mortgage rates showed some nice improvement following Wednesday's release of the Fed Minutes. Friday's key Employment report caused a reversal, however, and mortgage rates ended the week with little change.

From the presidential election until the last few days of the year, the trend in yields was upward, and this kept many potential bond buyers on the sidelines. Buyers finally stepped in at the end of the year and then

paused early this week. It appears that they were waiting until a major risk, the Minutes from the December 14 Fed meeting, was out of the way. When there were no surprises in the Minutes, investors felt comfortable purchasing bonds again. The rush to buy intensified on Thursday, pushing mortgage rates to the best levels in a month, but Friday's economic data halted the rally.

The most notable aspect of Friday's closely watched monthly

Employment report was an upside surprise in wage growth in December.

Average hourly earnings were 2.9% higher than a year ago, up

from 2.5% last month, and the highest level since 2009. Job gains

in December came in right on target. The unemployment rate increased

to 4.7%, as expected.

Another important economic report released earlier in the week also hinted at higher future inflation. Manufacturers reported that they expect a large increase in the prices to be paid for producing goods. Since it reduces the value of future cash flows, inflation is negative for mortgage rates. Already wary about inflation due to the manufacturing report, investors pushed mortgage rates higher after the wage data.

Looking ahead, the most significant economic report will be Retail Sales on Friday. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator. Before that, the JOLTS report will come out on Tuesday. JOLTS measures job openings and labor turnover rates. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday, and there will be many Fed officials speaking during the week.

Once again this year....Kiwanis had a great float focusing on children...in the 2017 Rose Parade.

"Thank you for always trusting in us to do the best for you and your family and please feel free to call me anytime you have questions. I will be happy to share with you whatever information you may need!"