Many factors play into home loan rates remaining in historically low territory, such as housing sales, current inflation and Gross Domestic Product (GDP).
According to an article posted by Mann Mortgage crediting the National Association of Realtors, January existing home sales increased 0.4 percent, in comparison to December sales, to an annual rate of 5.47 million units. In the past year, sales have increased 11 percent and this is the highest point since July 2015.
When it comes to mortgage bonds, inflation really should get a bigger spotlight. According to the Core Personal Consumption Expenditures index, inflation rose 0.3 percent in January from December and year-over-year 1.5 percent. Home loan rates are tied to mortgage bonds so an increase does not help maintain seemingly low mortgage rates.
Lastly, GDP is used to calculate the country’s economy strength and signifies the total dollar value of all goods and services produced over a particular time. The final GDP reading for last year also showed an increase. The expectation was 0.4 percent for the year, but 2015 pulled through with a whole 1 percent increase. According to Mann Mortgage, readings should be at least 2.5 percent to signify growth.
These fluctuating news updates worked cohesively to maintain the currently low home loan rates. Be sure to stay in the know when it comes to these three factors and hope that home loan rates remain in the lower territory.