Mortgage
Rate Predictions For November 2014 (FHA, VA, USDA & Conv)
CURRENT MORTGAGE RATES
Current mortgage rates continue to move lower.
According to Freddie Mac's weekly mortgage rate survey of more
than one hundred banks, 30-year mortgage rates averaged 3.98% last week,
marking the third week of sub-4 percent rates. The 15-year fixed rate mortgage
rate averaged 3.13%.
Conventional mortgage interest rates remain near 17-month
lows. VA and FHA mortgage rates are even lower.
Home buyers have benefited from low rates all year. Refinancing
households are now benefiting too. There are millions of U.S. homeowners now
"in the money" to refinance nationwide.
IT'S AN EXCELLENT TIME TO COMPARE TODAY'S MORTGAGE
RATES. PRICING IS AS GOOD AS IT'S BEEN ALL YEAR.
MORTGAGE RATES IN NOVEMBER
Last month, mortgage rates made big gains. When
October began, 30-year mortgage rates averaged 4.20%. Throughout the
month, they dropped as low as 3.92% before rising slightly into November.
The rate drop through October was significant in contrast to the
three months prior, when mortgage rates had barely moved at all. Rates moved
more in October than they did in the prior four months combined
In November, this trend may continue.
The market is wound tight like a coil and sits ready to spring.
There are a number of factors which could affect this month's mortgage rates:
More
Jobs In The Economy
Last month, the September Non-Farm Payrolls report showed
248,000 net new jobs added to the economy, raising this year's running
total to 2.04 million jobs added overall. Job growth has topped 200,000 in
seven of the last eight months, and more than 9 million jobs have been added to
the economy dating back to 2010.
Wage growth remains weak, but the jobs market is returning.
As more workers are added to the economy, consumer spending tends to rise and
inflation pressures tend to increase.
Furthermore, the Federal Reserve makes labor markets a focal
point for future policy and stimulus. As the jobs market expands, expect the
Fed to play a lesser role in holding today's mortgage
rates down.
A
Rise In Inflation Rates
The Federal Reserve also watches inflation rates. As inflation
rates rise, the Fed is more inclined to remove or slow its market stimulus,
which can cause mortgage rates to rise.
Furthermore, inflation is the enemy of low mortgage rates. This
is because inflation devalues the U.S. dollar which, in turn, devalues
dollar-denominated U.S. mortgage bonds. During periods of inflation, mortgage
rates tend to rise.
Since 2012, though, inflation rates have been stable, but
below the Federal Reserve's target rate of two percent. When inflation
rates run too low for too long, disinflation can
occur, and this can support low mortgage rates.
The Fed has taken steps to stimulate the economy and stoke
inflation but, thus far, those efforts have yet to show themselves fully.
Should inflation rates begin rising, mortgage rates are expected to jump.
Geopolitical
Concerns
Tensions in the Gaza Strip; between Ukraine and Russian; and, in
Africa each affect this month's mortgage rates. In general, as nations
move closer to war, U.S. mortgage rates improve. This is the result of an
investing pattern known as a flight-to-quality.
"Flight-to-Quality" describes, during periods of
economic or political uncertainty, the flow of money from risky assets toward
safe ones. Investors seek safe assets to protect their principal investments,
and to shield against loss.
So, because mortgage bonds are among the safest investment
classes in the world, 30-year mortgage rates tend to improve when war is
imminent; or, when large global economies face an uncertain future.
This is another reason mortgage rates moved lower in October. In
November, rates could begin rising.
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Best
Regards,
Eitan
Shafshak
Mortgage
Loan Officer
Tel: 702-998-9746
Cell: 702-265-2137
Fax: 702-475-3717
