“Should I stay or should I go now?” The Clash.
Investors asked that question all week as they considered in which markets they may have overstayed their welcome. Economic data sent mixed messages as to whether Stocks or Bonds would be more gracious hosts to investment dollars.
Case in point: After a whirlwind of job creation in October, November and December, the January Jobs Report showed a bit of a slowdown, according to the Labor Department. Payrolls rose by 151,000 in January. While still strong, the number is dwarfed by year-end leaps that helped make 2015 the second-best year for job creation since the late 1990s. The report also noted the Unemployment Rate dropped to 4.9 percent while wages increased, which is great news.
In other events, inflation remained tame, manufacturing data was weak and personal spending was unchanged from the prior month.
So, what does all this have to do with buying or refinancing a home?
When investors move dollars from Stocks to Bonds, Mortgage Backed Securities and other Bonds improve. Because home loan rates are directly tied to Mortgage Bonds, home loan rates can improve as well. Last week’s trading illustrated this, pushing home loan rates to lows not seen since April 2015.
On the housing front, home prices, including distressed sales, rose 6.3 percent from December 2014 to December 2015, according to CoreLogic, a leading global property information, analytics and data services provider. From November to December, prices were up 0.8 percent. CoreLogic cited strong demand and tight supply for the gains.
Looking ahead, home prices are expected to rise 5.4 percent from December 2015 to December 2016.
At this time, home loan rates are quite attractive. If you or someone you know has any questions about the housing market, current rates or home loan products, please don’t hesitate to contact me.