Employment growth over the past several months has indeed been impressive. The adjusted employment growth according to analysis by the Brookings institution shows that in November 2014 the economy added 423,000 jobs and in December 2014 we saw 329,000 employees added to payrolls. January of this year saw 435,000 employees added to payrolls and February saw another 295,000 additional employees hired to cap the best stretch of hiring since the economic downturn began.
Mortgage rates normally move in the opposite direction of positive economic news though sometimes it takes time for change to take hold. In the early part of this year mortgage rates trended near their all-time lows and rates were at their lowest point in 18 months in January. This was great news for the housing market and the government helped the housing market even more by lowering FHA mortgage insurance as a way to help first time homebuyers.
FHA mortgage rates in January of this year hit lows of 3.25% for a 30 year fixed rate loan while Conventional borrowers enjoyed rates in the 3.5% range. Following the recent announcement by the Labor department for February job numbers which as mentioned was the fourth straight month of strong job gains, rates started to respond as they historically have on positive economic news and ticked up ever so slightly to their current levels.
While mortgage rates are still very attractive and remain near all-time lows the best of the best interest rates appear to be behind us. Current FHA mortgage rates are approximately 3.75% for a 30 year fixed rate loan while Conventional rates are at 3.875%.
Economic forecasters who watch the economy and follow the Fed believe if the positive economic news continues then the Fed will be confident enough in the continued strength of the economy to raise interest rates slowly after keeping them so low for years.
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Because of the low mortgage rates housing affordability is at peak levels. With FHA mortgage rates still below 4% this is an excellent opportunity for first time homebuyers to get in to a home with a low FHA 3.5% down payment and a payment that in many cities will be less than what they are paying to rent an apartment.
This article “Strong Jobs Report Leads to Higher Mortgage Rates” was written by Stephen Khan. Stephen is a mortgage lender based in the Phoenix, Arizona area. To learn more about mortgage programs or buying a home visit Stephens website for more resources on the entire mortgage process.