Mortgage Market Update- Big Changes for Fannie

Mortgage Update: Rates, Jobs & a Big Fannie Mae Change

We got some important mortgage news over the last week.

First, the August jobs report came in much stronger than expected. The economy added 162,000 jobs, compared with expectations of roughly 56,000.

Normally, a strong jobs report is good news. For mortgage rates, though, it can have the opposite effect.

A stronger economy gives the Federal Reserve less reason to lower rates and can keep inflation concerns alive. Treasury yields jumped immediately after the report, putting additional pressure on mortgage rates. Interestingly, mortgage rates themselves only moved slightly higher Friday, rather than having the big jump we sometimes see after a strong jobs report.

So, for now, we're still dealing with mortgage rates in the upper 6% range, and this week's inflation reports could move things again.

But there was also some really good mortgage news.

Fannie Mae just made it easier to qualify for a new primary residence while keeping your current home and converting it into a rental.

Under the new guidelines, you may not need to have a tenant lined up or a signed lease before closing. Instead, we may be able to establish market rent using an appraisal or comparable rental data and use a portion of that rent to help offset the mortgage payment on the home you're

keeping.

That's a BIG change for homeowners who want to move but don't necessarily want to sell their current home.

The takeaway: Rates are still volatile, but lending guidelines are also changing in ways that could create new opportunities.

If you've been thinking about buying another home but assumed you'd have to sell your current one first, it may be worth running the numbers again. The rules just changed, and you may have more options than you think.