Mortgage rates see biggest one-day jump since last year – What it means for homebuyers

TheStreet’s J.D. Durkin brings the latest business headlines from the floor of the New York Stock Exchange as markets close for trading Monday, February 5.

Full Video Transcript Below:

J.D. DURKIN: I’m J.D. Durkin, reporting from the New York Stock Exchange. Stocks were in the red to close out today’s session. The Dow closed down 275 points, the Nasdaq closed down two-tenths of a percent, and the S&P closed three-tenths of a percent lower. This comes after Fed Chair Jerome Powell indicated that interest rates would likely need to stay higher for longer due to persistent inflation. Markets are now pricing in a 14 percent chance that the Fed cuts rates when it meets in March.

Separately, investors will be looking out for earnings from Snap, Spotify, and Chipotle due out Tuesday.

In other news, for the first time since December, mortgage rates have climbed back above 7 percent. According to Mortgage News Daily, the average rate for a 30-year fixed mortgage now stands at 7.04 percent. Rates saw their biggest one-day jump in over a year after a higher-than-anticipated January jobs report, as well as a high monthly manufacturing report.

Those looking to buy a home in 2024 should take particular note as even small changes in the 30-year can impact monthly mortgage payments by hundreds of dollars.

2023 was one of the worst years for home sales in almost three decades, with high prices and limited supply making it tough on prospective home buyers. According to the National Association of Realtors, home prices rose again in December, marking the sixth consecutive month with year-over-year hikes. The median price for a home in 2023 was a record-high $389,800.

So, what does this say about the outlook for the rest of the year? Mortgage News Daily’s Chief Operating Officer says, “The future of rates in 2024 is all about ifs and thens. If we see more data like last Friday’s jobs report, rates will have a hard time getting back below 7%. But inflation is even more important than the labor market. If inflation comes in cooler than expected, it could balance the outlook.”

That’ll do it for your daily briefing. From the New York Stock Exchange, I’m J.D. Durkin with TheStreet.

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