Super Low Rates Again, Frisco! Employment-Bad, Earnings-Good

We have seen consecutive days all week long of a better mortgage rate market. Rates are now at rock bottom again, and I think maybe for the last time before we see the recovery of our economy begin to ramp up. Ted Jones, the Chief Economist of Stewart Title North Texas, believes that the recovery will also bring higher rates. This means that because signs show that we are closer now than ever in the recent years to a recovery, we are also closer to interest rates going up...unless Bernanke has something super up his sleeve.

The unemployment report by the Labor Department reported that we still saw 216,000 jobs lost last month, so we are still seeing a large number of people losing jobs, but we saw less job losses than The Labor Department expected...so that is better than we hoped, therefore moving in the right direction.

Earnings on the other hand are doing better. There was a .3% increase in earnings...meaning the people in America are losing jobs, but the ones keeping there jobs are seeing an overall increase in their pay.

Take note on this thought. As we start the recovery in America, and interest rates for mortgages start going up, we'll have a larger qualifying number of possible home buyers, but since rates will be higher, the monthly costs for the homes will be higher. My point: The principle and interest payment for a $200,000 loan today at 4.875% is $1,058.97. Rates are expected to go as high as 7.5% in the next two years. These means that same home with the $200,000 loan at 7.5% would have a payment of $1,398.76...$339.79 more a month. So the home that you want and can afford today, may not be the home you can afford to buy in two years.

If you are looking to move in the next couple years, it may be time to buy now before you can't afford it in the years to come. If you would like a better explanation of how waiting may price you out of the market, go to Ted's Blog and read what he says.