Jackie Cruz

NMLS # 260665

801-272-0600

cruzlending@yahoo.com

Jackie Cruz Mortgage Loan Advisor

What Drives Utah Mortgage Rates?

What Drives Utah Mortgage Rates?

When you’re buying a home or refinancing, Utah mortgage rates can often seem pretty mysterious. They can move up and down each day —sometimes changing several times in just one day!  Here’s why: Mortgage rates are highly dependent on economic news. In many cases, good news for the economy is often bad news for interest rates.

Know those reports that the government issues each month to gauge economic activity? Each of those can affect mortgage rates. One of the most influential is the employment data released monthly by the Bureau of Labor Statistics. Mortgage rates tend to go up when the economic news is good, such as when the unemployment rate goes down and the job growth is strong. On the flip side, higher unemployment, weaker job growth and a decline in housing demand each have the tendency to push Utah mortgage rates lower.

In addition to all of those reports it releases each month, the U.S. government can affect mortgage rates in a much more direct way. The Federal Reserve, while it has no way of directly setting mortgage rates, can take a number of steps that can help keep mortgage rates low. In fact, it’s done just that since the last recession as a way to help generate economic activity and help the housing market. As the economy continues to improve, the Fed has indicated it will take a more ‘hands-off’ approach, which could set the stage for higher rates.

The stock market also can impact mortgage rates. When the stock market is doing well, investors tend to move money out of bonds and into stocks. This shift from bonds to stocks causes the price of bonds to drop, which triggers a chain reaction that often pushes mortgage rates higher. Did you follow me on that one? Don’t worry if you didn’t. Just remember this: Bad news on Wall Street can be great news for mortgage rates — and vice versa.

Another factor affecting mortgage rates is inflation. Higher prices or a threat of higher prices often mean higher mortgage rates. Specifically, you’ll often see mortgage rates increase along with a higher Consumer Price Index, higher wholesale prices, and higher hourly earnings.