For now the sixth week in a row, mortgage rates continue to improve, according to the weekly survey of average mortgage rates published by Freddie Mac. Signs are showing buyers returning to the market but not yet in droves. For savvy buyers, now might be an opportune time to be in the market!
Part of the reason for the rapid improvement has been the idea – expectation, really – that the Fed is finished hiking the Fed Funds Rate and that they may start even cutting the rate come March. Of course, this is all speculation based on what the Fed has done in the past, and there are no guarantees.
As for Friday’s Jobs Report, it revealed the number of jobs available declined. The number was less than expected and shows a slowing in the labor market and further evidence of a cooling off in the economy with slower demand and less inflation. Analysts look to these facts as further evidence that the Fed may be done raising its interest rate.
The Fed walks a tightrope balancing the desire to tamp down inflation by raising its interest rate and dropping the rate at the right time to prevent throwing the economy into recession by keeping rates too high for too long. We’ll have to wait and see how things shake out.
Speaking of the Fed, this week, there are numerous high-risk economic events that could affect mortgage rates, namely the Fed meeting that kicked off Tuesday and will adjourn Wednesday. We’ll get our first look at the Fed’s reaction to lower inflation and see what they say their future policy decisions might look like.
We’ll also get a look at the latest consumer inflation rate with the CPI (Consumer Price Index). Core prices in November are expected to accelerate slightly to a monthly increase of 0.3 percent versus a 0.2 percent rise in October. Overall prices on the month are expected to come in unchanged as they did in October. Annual rates are expected to only slightly lower at 3.1 and 4.0 percent respectively.
Fast on the heels of the CPI is the PPI (Producer Price Index), where we’ll get a look at wholesale price inflation. Producer prices in November are expected to edge 0.1 percent higher in the month versus a decline of 0.5 percent in October. The annual rate in November is seen at plus 1.0 percent versus October’s plus 1.3 percent.
And finally, we get a look at Retail Sales, an important indicator of economic activity, especially this time of year. November sales are expected to slip 0.1 percent to match October’s 0.1 percent dip that followed September’s 0.9 percent jump.
I’ll keep an eye on all of it for you and report back next week!
