Have a client who found the right home but still needs to sell their current one? Don’t let timing automatically take them out of the running.
A bridge loan* is short-term financing that may help qualified homeowners bridge the financial gap between their current home and their next one. For the right buyer, it can provide more flexibility to move forward before their existing home sells.
That could be especially helpful when a buyer finds a home they don’t want to lose or wants more flexibility when structuring an offer.
Bridge financing isn’t right for every scenario, so bring me into the conversation early. I can help your client understand how it works, review the numbers and determine whether it makes sense.
Have a buy-before-you-sell scenario? Let’s talk through the options.
*All credit decisions for brokered products will be made by a third party. Restrictions and limitations apply.
Weekly Market Update
Mortgage rates moved higher Friday following a much stronger-than-expected October Jobs Report, but the increase wasn’t enough to erase the improvement we’ve seen in recent weeks.
Employers added 165,000 jobs in October, well above expectations, while unemployment fell to 4.1% and wage growth exceeded forecasts. Treasury yields initially jumped on the news before settling back, with the 10-Year Treasury trading near 4.87%.
While rates gave back some of Thursday’s gains, the bond market’s relatively measured reaction was encouraging, particularly after several weeks of elevated volatility.
What’s Driving Rates Right Now?
Hiring was much stronger than expected. October payrolls increased by 165,000, compared with forecasts of roughly 70,000. Previous months were also revised higher by a combined 84,000 jobs.
The labor market remains resilient. Unemployment declined to 4.1%, while average hourly earnings increased 0.4% for the month, reinforcing concerns that inflation pressures may persist.
Expectations for another Fed rate hike increased. Markets are now pricing roughly a 78% probability of a December increase, up from approximately 67% Thursday.
Treasury yields held onto recent improvement. Despite the strong Jobs Report, the 10-Year Treasury remained below 4.90%, well below the levels above 5.00% seen in October.
Inflation expectations showed some improvement. Preliminary consumer survey data indicated that one-year inflation expectations declined to 4.3% from 4.7%, providing a potentially encouraging signal.
Oil prices have eased. Brent crude is trading near $98 per barrel, down significantly from recent highs and helping reduce some energy-related inflation pressure.
What’s Next?
Consumer Price Index (CPI) – November 10
Next week’s inflation report will be one of the most important tests for mortgage rates.
A cooler-than-expected reading could build on recent improvement and give investors greater confidence that inflation is easing. A hotter report could renew upward pressure on Treasury yields, particularly following Friday’s strong employment data.
Treasury Auctions – November 9–12
Several Treasury auctions are scheduled next week, including a closely watched 10-Year offering Tuesday. Strong investor demand could provide additional support for bond prices and mortgage rates.
Federal Reserve Outlook
Friday’s employment report increased expectations for another Fed rate hike in December. Investors will be watching upcoming inflation data for clues about whether additional tightening will be necessary.
Bottom Line for Borrowers
Friday’s Jobs Report was stronger than expected and initially pushed mortgage rates higher. However, the bond market held onto much of its recent improvement, which is an encouraging development.
The 10-Year Treasury remains below 4.90%, a meaningful improvement from the levels above 5.00% seen just a few weeks ago. Lower oil prices and improving inflation expectations are also providing some support.
For homebuyers and homeowners, the outlook remains cautiously encouraging, although continued volatility is likely. Next week’s inflation report could play an important role in determining whether rates can continue improving or face renewed pressure.
Key Level to Watch
The 10-Year Treasury is near 4.87%, remaining below the important 4.90% level despite Friday’s strong Jobs Report. A sustained move below 4.80% could provide additional relief for mortgage pricing, while a return above 5.00% could signal renewed upward pressure.
Are you concerned with the recent increase in mortgage rates? Is this impacting your decision to buy? Click on the link below.
