Big Data and Low Interest Rates are in the news again! Palm State Mortgage Company kept watch on interest rates last week. We saw them sink to the lowest level since November’s election.
According to Big Data, the seasonally adjusted mortgage volume jumped up in response 7.1 percent. However, on the other side of the story is that the volume of home mortgage loans was already 16 percent lower than the same week last year. Last week, we saw “the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $424,100 or less” lower to 4.14 from the 4.17.”
Last fall we saw interest rates on home loans go from 3.77 percent to “4.16 percent in the two weeks following the election of President Donald Trump last November.”
Data Creates Incentives For Home Buyers
Likewise, we also noticed that current applications for loans has been steadily rising. It is now at its highest point since May of 2010. CNBC reports, “Purchase application volume increased to its highest level since May 2010.”
Big Data shows that refinancing loans rose a little also, but only a tiny bit. Just the same, the number of applications generated by from home purchases is where the real story might be. This statistic “jumped 10 percent higher over last week’s from the previous week, seasonally adjusted…”
We see a real improvement now that it has scaled up 5.5 percent higher than one year ago. However, purchase remains at a quiet level due to the ever tightening number of homes for sale.
Big Data on Home Affordability
To check out affordability, we look at the types of loans borrowers are seeking. Here at Palm State Mortgage we have noticed the big downward trend for choosing fixed-rate loans. After all, they have slipped down 18 percent when compared to their 2016 performance. However, applications for adjustable-rate loans…are up 26 percent.”
This is not a difficult trend to understand, if you realize that adjustable-rate loans currently offer lower interest rates.
Big Data: Those Rate Sensitive Re-fi’s!
As we mentioned, the refinance market enjoyed a small boost. Very small. Data indicates interest rates on re-fi’s have only increased 3 percent. However, homeowner, beware! The volume is 34 percent beneath last year’s data amount. Experts are telling us there is a reason; “refinances are extremely rate-sensitive, and rates were below 4 percent last year.”
The Week Ahead: Bringing Big Data Up To Date!
The Federal Reserve will be making decisions Tuesday and Wednesday. At Palm State Mortgage Company, we expect another quarter point rate hike.
Here are the three reasons this development will be significant to you and to us:
1. Benchmark Data:
Anything you own that is a variable-rate credit product, like houses, cars or credit card accounts, you will be paying more. Now, it won’t be a lot more, but it will require a few extra dollars out of your monthly budget. And yes, it happens quickly. Experts assure us, “The prime rate generally gets reset almost immediately after the Fed’s decision comes down. So, you’ll feel the impact soon.”
2. Data Analysis:
In spite of the fact the current market believes it knows the Fed future, they will still want to know all the details of the Fed’s meeting.
This is in anticipation of what they can predict next week or next month.
Second, while the market feels like it knows what the Fed will do, it’s almost as important learning why they did it.
So investors will want to peruse the post-meeting statement closely for clues about what’s ahead. It’s all about watching what happens with the economy and the market.
3. Forecasting Data: As they release their information, the Fed will undoubtedly explain where they see economic growth happening and where the rates are going.
And Now: The Take-Away for Big Data!
Later this week, we can check on the economy, housing and employment. So, data collectors, it will be a big week for you! And if you are house-hunting, stay awake for it, and aware of it all. And remember, no matter how the economy is doing, your interest rate and mortgage deal are reflections of your personal economy too.
To steal from another advertising slogan, “What’s In Your Budget?” A mortgage payment? A down payment? House expenses? As we have said previously, Palm State Mortgage can help you figure it out. We will help you find the best lender, not only to cope with national big data, but also to match your personal fiscal life.