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Market Commentary 1/7/17

Posted on January 6, 2017 by Damon Germanides

Interest rates rose in response to a lackluster December jobs report. Within the report, there was an increase in hourly wages from November to December, which is inflationary and probably the reason for the sell-off in bonds. Wages also increased year over year at 2.90%, the largest increase in many years. The headline jobs number came in lower than expected with 156,000 jobs created versus 175,000 projected. The unemployment rate ticked up to 4.70% and the closely watched labor force participation rate and U6 reading ticked up as well.

Going forward, we don’t envision rates shooting straight up, however we are mindful that it’s more likely that interest rates will increase in the coming months given the President-Elect’s desire to create a more pro-business and pro-growth environment.

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These are the opinions of the author. For financial advice, please talk to your CPA or financial professional.

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(2) Disclosures

(1) Minimum FICO, reserve, and other requirements apply. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. Rates, points, APRs and programs are subject to change without notice. Actual closing times will vary based on borrower qualiﬁcations and loan terms. All loans are subject to credit approval. (2) “Loan to Cost” (LTC) is defined as the acquisition price of the property plus the cost to build as determined by a bank appraisal. Contact your loan officer for additional program guidelines, restrictions, and eligibility requirements. (3) With an interest-only mortgage payment, you will not pay down the loan's principal balance during the interest-only period. Once the interest-only period ends, your payments will increase to pay back the principal and interest. Rates are subject to increase over the life of the loan. Contact your Insignia Mortgage, Inc. loan officer to determine what your payments might be once the interest-only period ends. (4) With an adjustable rate mortgage (ARM), the loan payment will adjust after an initial period and then adjust on a regular basis as set forth in the loan documents. For example, a “3/1” loan will have an interest adjustment 3 years after the loan closes and every 12 months thereafter. Also, the loan will be subject to annual and lifetime adjustment caps. Contact your Insignia Mortgage loan officer to determine what your payments might be once the fixed rate period of the loan ends. (5) Insignia Mortgage, Inc., is a real estate broker licensed by the CA Bureau of Real Estate, DRE #01969620, NMLS #1277691.