Average mortgage rates had dropped nicely, by half a percent, as of last week’s mortgage rate survey published by Freddie Mac, on continued worries over a possible recession coming this year. However, by week’s end, with strong enough economic data – especially a stronger than expected Jobs Report, rates reversed course ending higher.
Yes, markets have been volatile! The charts over the last month look like a rollercoaster at Six Flags! And this week we have more inflation data coming that will undoubtedly feed into that volatility.
However, the silver lining is that we’re seeing the housing market loosening up in many areas. I know it’s not news to you, but we’ve been in a seller’s market for the last 2 years. Now we see the market shifting, the numbers are showing more negotiation happening and prices improving.
I’m expecting to see the buyers that have been marginalized over the last couple of years because of the competitive market – first-time young, Millennial home buyers, single women, people of color, and small business owners – begin to come back to the table.
If this is you, I invite you to call on me to be your advocate. I’ve been in the mortgage business for close to 20 years, I know how to get deals done that are in your best interest. Let me be the insider that helps you get the deal done for your home purchase! Reach out to me, reply to this email, call or text me at 818.307.6072.
As for what I’m watching this week…
All’s pretty quiet until we get to Wednesday’s report on Consumer Prices. The Consumer Price Index (CPI) is expected to shoot 1.1 percent higher on the month in June versus a much hotter-than-expected 1.0 percent rise in May. The year-over-year rate is seen at 8.8 percent versus 8.6 percent. If the rate of inflation is higher than expected, look to see increased volatility in markets and rates could rise on the news.
Hot on the heels of the CPI comes the report on Wholesale Prices (PPI). Producer prices are expected to rise 0.8 percent on the month in June to match May’s increase. Excluding food and energy, the expected increase is 0.5 percent which would compare with May’s 0.7 percent. It’s generally the wholesale prices that feed into the consumer prices so if these show moderation we’ll be keeping our fingers crossed that moderation will flow through to consumers soon.
And of course, inflation has the potential to affect Retail Sales and we’ll see those numbers come out on Friday. Retail sales proved disappointing in May, falling 0.3 percent as rising prices dampened discretionary demand. But a return to the plus side is expected for June where the consensus is a 0.9 percent gain. However, when we exclude gasoline sales the prediction of Retail Sales is dipping 0.2 percent.
