Derek McGowan argues mortgage rates are stuck near three-year lows because Middle East tensions are keeping oil prices elevated at $90 a barrel. Recent jobs data shows weakness: December-January revisions fell from 180,000 to 111,000, and February lost 92,000 jobs instead of gaining 59,000. Once the conflict resolves, rates should fall.
Mortgage rates will drop further as soon as the conflict resolves in the Middle East. You probably have seen mortgage rates are already near 3-year lows right now, but they're not allowed to really unlock a lower level, which normally would happen because of the recent economic data we've seen, because the Strait of Hormuz is jammed up and oil, you know, supply lines are tied up and oil prices have went from $70 a barrel to $90 a barrel. But if that wasn't the case, we would actually get credit for some of the recent economic reports that came out. So for example, December and January jobs reports were revised down from 180,000 jobs down to 111,000 jobs. They were overstated by 40%. It wasn't accurate. Then in February, the job report was expected to announce 59,000 jobs created. We actually lost 92,000 jobs, a huge swing. This would be a heyday for mortgage rates right now, but oil prices going up has them stagnant and kind of elevated. As soon as the supply lines open back up and the conflict resolves, watch for mortgage rates to further lower.
