The market volatility that was seen in May surprisingly saw the closely watched 10-year yield decline, the S&P 500 stock index ended unchanged while Mortgage Bonds saw slight gains. Even the 30-year fixed-rate mortgage has declined from the highs seen in mid-May.
But looking ahead … “What’s Not to Watch” should be the title. Geopolitical headlines, inflation pressures, rate hike fears, supply chain woes, slowing economic growth, runaway home price gains, and a cockeyed labor market are on the radar for the investing community to tackle.
Let’s look at the job market. Currently, there are 11.4 million jobs available with 6.5 million unemployed. Weekly Initial Jobless Claims are at lows seen since 1970. The tech sector heavily laid-off workers in May. Talk about an upside-down jobs market.
But what is really on the radar will be the mid-June Federal Open Market Committee meeting scheduled for the 14th and 15th. What the Fed says about the job market and inflation, its dual mandate, will be key for investors that are looking ahead. In addition, the Fed’s balance sheet will be discussed at the meeting as the central bank begins to pare down its massive near $9 trillion balance sheet.
Home borrowing costs may have topped out in the short term and if the economy slows further, we may not see higher rates in the near future.
Bottom line: For those in the market to purchase a home, now is a great time. Rates have improved slightly but any improvement from here may be modest as inflation remains very high.
Source: Mortgage Market Guide
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
