February 2019 Economic Forecast

As we enter the second month of 2019, stocks posted their strongest January gains in over 30 years (+10%) and interest rates continue an accommodative trend for consumers. Thus far the Federal Reserve has backed up their promise to remain patient with potential rate hikes. At the conclusion of their January policy meeting, Fed Chairman Jerome Powell announced no change to the Federal Funds rate target (2.25% - 2.50%) and stated explicitly that “the case for raising rates has weakened somewhat.” Strong private sector employment gains have been offset by the US government shutdown and a concern about slack in the global economy. While the government shutdown has been temporarily resolved, there remains no permanent solution to it. The estimated damage to the economy of about $3B is manageable, but permanent.

Meanwhile the 10 year Treasury rate which has a more direct impact on long term mortgage rates, closed January, near 3 month lows (2.64%). At the end of January, Freddie Mac’s benchmark 30 year fixed rate hovered around 4.46%, .21% higher than Own Up’s Home Composite* 30 year rate.


Mortgage Product

Primary Rates*

Investment Rates*

30yr Fixed

4.25%

4.875%

15yr Fixed

3.5%

4.00%

10/1 Arm

3.875%

4.875%

7/1 Arm

3.75%

4.625%

*Own Up’s Home Composite reflects actual rates provided to homebuyers & existing home owners for the week ending 2/1/2019 for purchase transactions with borrowers of 740+ FICO, single family home with 10% downpayment. Everyone’s specific scenario is different, so please reach out to a Home Advisor for your personalized rate quotes.
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