The Rising Unemployment Rate Foreshadows Lower Mortgage Rates
webadmin • June 16, 2024
The Rising Unemployment Rate Foreshadows Lower Mortgage Rates
The unemployment rate is up .6% since April 2023 and currently stands at 4.0% according to the Bureau of Labor Services (BLS). Current economic trends suggest an increase to 4.1% or 4.2% could be on the near-term horizon. This potential rise is significant as it often serves as a bellwether for recessionary pressures, influencing the Federal Reserve's policy decisions, particularly regarding interest rates.
This proactive approach not only secures your home ahead of others but also capitalizes on current opportunities where sellers might be willing to contribute towards your closing costs. Moreover, if interest rates do drop after your purchase, you have the option to refinance at lower rates with NEO Home Loans Free Refinance program. This program allows you to refinance with no additional lender fees, providing an excellent opportunity to reduce your mortgage payments when rates become more favorable.
The Link Between Unemployment Rates and Mortgage Rates
A climbing unemployment rate typically signals weakening economic conditions, prompting the Federal Reserve to potentially lower interest rates to stimulate the economy. This action in turn affects long-term mortgage rates, which are closely tied to this broader slowdown of the economy and reduction in inflation. If unemployment hits the anticipated mark of 4.1% to 4.2%, it will likely be the trigger that leads the Federal Reserve to cut short term rates, and signal lowering mortgage rates as well.Implications for the Housing Market
- Increased Affordability: Lower mortgage rates make home buying more accessible for a larger pool of potential buyers. Cheaper borrowing costs mean lower monthly payments, which can broaden the market of individuals able to afford homes. It’s estimated that five million more Americans can afford homeownership with every one percent reduction in mortgage interest rates.
- More Competition: While more affordable rates are beneficial for buyers, they also lead to increased demand and competition in the housing market. As more people are able to enter the market with lower mortgage payments, demand for available homes rises, which drives up prices as a result of lower mortgage rates.
- Strategic Opportunities for Buyers: Lower mortgage rates are very likely on the horizon, but timing a home purchase is like trying to thread a needle. Move too early and you finance at elevated rates and monthly payment. Move too late and home prices will shoot higher as demand increases with lower mortgage rates.
Beat the Rush by Purchasing Early
Interest rates are hovering at a point where any reduction in mortgage rates would likely attract massive numbers of buyers into the market. By choosing to purchase your home now, before a potential rate drop, you can avoid the rush and competition that often comes with more favorable borrowing conditions.This proactive approach not only secures your home ahead of others but also capitalizes on current opportunities where sellers might be willing to contribute towards your closing costs. Moreover, if interest rates do drop after your purchase, you have the option to refinance at lower rates with NEO Home Loans Free Refinance program. This program allows you to refinance with no additional lender fees, providing an excellent opportunity to reduce your mortgage payments when rates become more favorable.
Here at Luminate Home Loans, we’re always looking for ways to offer more value to our clients and partners. That’s why we’re thrilled to announce that we’re now a wholly owned subsidiary of Luminate Bank®—and soon, we’ll officially transition under the Luminate Bank® name.
For years, homebuyers have been hoping for a return to the ultra-low mortgage rates seen during the pandemic. But as we move through 2025, it’s becoming increasingly clear that today’s rates—hovering between 6% and 8%—aren’t going anywhere.
Luminate Bank® Welcomes Josh Eifert as Chief Financial Officer, Honoring Legacy of Dave Turk [Minneapolis, Minn.] – [2/4/2025] – Luminate Bank® is proud to announce the appointment of Josh Eifert as its new Chief Financial Officer, succeeding Dave Turk, who has played a pivotal role in shaping the company's strong financial foundation. Josh brings a wealth of experience and strategic vision to Luminate Bank, with 26 years in the banking industry. Most recently, Josh served as CFO at Tradition Capital Bank in Edina, Minnesota, where he led the financial strategy during its remarkable growth from $300 million to more than $2.5 billion in total assets. Before his tenure as CFO, Josh contributed to Tradition Capital Bank in other key financial roles. He began his career with Norwest and Wells Fargo Banks, gaining extensive expertise in financial and operational capacities. Luminate Bank's leadership transition reflects the company's thoughtful succession planning, ensuring its financial strategies remain robust and forward focused. Under the leadership of Dave Turk, Luminate Bank has built an exceptional financial infrastructure, delivering consistent results and creating a foundation that positions the company for continued success. Luminate Bank's CEO, Marc Campbell, shared his confidence in the appointment: "Josh not only brings exceptional financial acumen and strategic insight to Luminate Bank, but he also embodies the principles that define our organization: integrity, innovation, and a steadfast commitment to excellence," Luminate Bank's CEO, Marc Campbell, shared with confidence. "His leadership will ensure our financial strategies succeed and inspire confidence across all who depend on us." "I am honored to join Luminate Bank at such an exciting time. The company's remarkable history of financial excellence and its forward-thinking approach align perfectly with my values and vision," stated Josh Eifert. "I look forward to collaborating with the talented leadership team to build on this strong foundation and drive continued success for our customers, employees, and stakeholders." Josh graduated from the University of Minnesota with a degree in finance and completed the Graduate School of Banking at Colorado. CEO Marc Campbell expressed gratitude for retiring CFO Dave Turk's contributions, saying, "Dave has been instrumental in positioning Luminate as a financial leader. His dedication, insight, and stewardship will always be a part of our company's legacy." Josh Eifert will officially assume his role on February 18, 2025. About Luminate Bank® At Luminate Bank, We Open Doors—empowering individuals and families to achieve their financial dreams through personalized service and innovative digital solutions. As a nationwide bank headquartered in Minneapolis, Minnesota, we are committed to helping our clients meet their financial goals with a blend of modern technology, traditional values, and the trusted guidance of experienced professionals. Known for our exceptional commitment to customers, we take pride in delivering a seamless, supportive experience for every step of the journey. Our dedicated mortgage division has branches and a team of loan originators across the US, making expert home financing solutions accessible to communities nationwide. Luminate Bank is committed to safeguarding your money and accounts with FDIC insurance coverage up to applicable limits. Learn more about how we can open doors for you at www.luminate.bank , follow us on Instagram, LinkedIn, and Facebook, or call (952) 939-7200. For media inquiries, please contact: Debbie Schwake, CMO debbie.schwake@luminate.bank
Have a question or concern for our team?
We're ready to help!
COMPANY
Luminate Bank
NMLS# 1281698
