There has been another twist in the ongoing conflict in the Middle East today.
Renewed hope for a deal after President Trump said, “Major progress has been made toward a Comprehensive and Final Agreement with Iran’s representatives.”
That was yesterday afternoon though, and his latest Truth Social post took a very different tone.
In it he said, “If they disagree [to terms]the bombing begins, and, sadly, it will be at a higher level and more intense than before.”
Simply put, it feels like the prospects for an end to the war are once again very difficult.
Therefore, the decline in mortgage rates today may not be guaranteed or permanent.
Real Estate Rates Fall on Possible End of War
If you’re wondering why mortgage rates are so low today, it’s because there were rumors about the end of the war.
Sound familiar? Maybe. Because it is not the first time to happen, but to be very fake.
So what happened this time, “The White House believes it is nearing a deal with Iran,” according to a so-called exclusive from Axios.
Of course, in the same special article, they say that “it may be difficult to make a consensus among all the different parties.”
And that “American officials remain skeptical that a preliminary agreement will be reached.”
In other words, it sounds like the same back and forth we’ve been hearing for weeks if not months now.
And there are always new threats to escalate things if an agreement is not reached.
So for the bond market to rally today with low oil prices, everything tied to a potentially volatile report seems out of the question.
Yes, I want a solution like everyone else, but to think that we will wake up one day and everything is agreed upon while threats are being made seems silly.
So if you’re looking at mortgage rates closely, maybe take today as a gift, but be warned that they can easily go up again.
Jobs Are Coming Hotter Than You Expected!
Another interesting thing here is that the ADP jobs report released today came in above expectations.
109,000 new jobs were created in April, above the median forecast of 84,000 jobs and nearly double the 61,000 from the previous month.
Additionally, it was the largest monthly job gain in 15 months, indicating strength in the labor market.
If we assume that labor participates better than expected and inflation picks up again, partly because of the war in Iran and oil prices, that could put more pressure on mortgage rates.
While I’m not entirely convinced about the strength of the labor market, another tepid jobs report on Friday will boost mortgage rates.
And indeed any current momentum coupled with renewed inflation concerns should push mortgage rates higher.
So again, take a win today if you lock in the loan amount, but be very careful if you think that the rates may be better and float your value.
Things can change quickly and for me at least, there is still more pressure going up than down.
Sure, prices could ease a lot, but there seems to be more room to run higher than lower right now. And prices are always quick to rise and slow to fall!
Continue: Use the mortgage rate calculator to quickly compare different rates at .125% or .25%.
