Unemployment Rates Trump Interest Rates
Let’s face it – the housing market is not going to make any significant strides until the unemployment rate drops. For the most recent Central Florida Housing Market Report click here.
The data ending the third quarter indicates the average rate on a 30 year fixed loan fell to 4.32% - the lowest average rate in the 40 years of record keeping. Fifteen year fixed rates fared even better at 3.75%. Five year ARMs averaged 3.52% and 1 year ARMs averaged 3.48%. All of these rates are fantastic.
But without a job – people can’t make mortgage payment, let alone qualify for a loan. The unemployment rate at the end of August in Central Florida is just shy of 12% - higher than the 9.5% national rate. This rate doesn’t take into account those who have given up looking (officially labeled the “discouraged”) and those who have found either part time work or are under employed. Many economists state that when these are taken to account – the rate is at least 5 - 7% higher.
Jobs – and not “make-work” jobs generated by tax and spend philosophies that are counted for a month or two to score political points - and true economic growth is what will return us to more prosperous times and with it bring the housing market back around.
At least that’s how we see it.