How Mortgage Rate Trends Should Affect Your Job Choices
The Great Resignation. The term has been used to describe the massive shift in the workforce that began in 2020 and has continued into 2022. According to the US Bureau of Labor Statistics, between November 2020 and November 2021, nearly 70 million Americans left their jobs, and nearly 75 million started a new position. If you are considering making a career move, you may want to factor mortgage rate trends into your decision-making.
What are Mortgage Rate Trends?
Mortgage rate trends track the aggregate change in the range of interest rates for mortgages in the US. According to Rocket Mortgage, banks receive new rate sheets every day that detail the mortgage rate trends and help those banks to determine the mortgage rates that they will offer to qualified borrowers that day. They go on to explain, "mortgage rates are affected by the overall economy. When the economic outlook is good, rates tend to increase, and rates fall when they're not so great."
Tracking those mortgage rate trends can help you to make more economically sound decisions when it comes to your job, particularly when it comes to buying or selling a house.
Mortgage Rate Forecast: A good time to sell?
If you are considering a new job offer that requires you to move, you may want to take a close look at the mortgage rate trends as you consider that offer. Low mortgage rates often encourage new buyers to enter the market. More buyers mean more potential demand for your house if you sell.
Mortgage Rate Forecast: A good time to buy?
Similarly, if you are looking to buy a new house because you are moving to a new location, or just leveling up, mortgage rate trends can play a big part in your own mortgage costs. If mortgage rates are trending particularly high, maybe buying at this time is not a great idea. That may make your new job offer less attractive, or you may want to negotiate a more robust relocation package.
How Does Personal Employment History Impact Mortgage Rates?
Your personal employment history can also play a big factor in your mortgage rate. In addition to mortgage rate trends and forecasts, banks pay close attention to your financial history when making lending decisions. According to Quicken Loans (now Rocket Mortgage), "whether you're a first-time homebuyer, fresh out of college and accepting your first job offer or a seasoned homeowner who's looking to relocate for a change in career, getting a mortgage with a new or changing job can be a bit complex.” They go on to explain that:
When underwriters look at your employment, they'll typically obtain information such as your position title, length of employment, and even the likelihood of your employment to continue. They'll also consider your income (the amount, the history, and the stability) in order to confirm that you have the means to make your mortgage payments each month.
This means that the timing and specifics of your job change can be huge factors in your personal mortgage rate trends.
Perhaps it's best to delay a job change if you are in the middle of a mortgage application process. Perhaps it's best to take the job (or leave the job) right away, but to wait until the mortgage rate trends change to buy or sell your house.
One thing is certain, however: your employment history is vital in determining your mortgage rate.
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