Even with Uptick, Rates Remain at Historically Low Levels

Last week we saw evidence – in the reports on consumer and wholesale prices – that inflation continues to rise and as we know, this can often cause a rise in rates. This seems to be the case as the latest survey on average mortgage rates, published by Freddie Mac, reported that the average rate for a 30-year fixed rate mortgage rose to its highest level since April.

“As inflationary pressure builds due to the ongoing pandemic and tightening monetary policy, we expect rates to continue a modest upswing,” says Sam Khater, Freddie Mac’s Chief Economist. 

Keep in mind that historically speaking rates are still at amazingly low levels so if you’ve been sitting on the sidelines waiting to refinance or lock in your purchase mortgage, it’s not too late. That being said, we do expect rates to continue to rise in the short term, so consider that levels now are likely lower than they will be in the near future. Reach out by either replying to this email or you can call/text me if you would like to explore your options, whether a purchase or a refinance. 

As for the rest of the week…

We’ve got a couple of reports coming on the housing market, but it’s a relatively quiet week in terms of economic reports. I will be watching the 10-year Treasury yield for cues about the trend for mortgage rates. We’d like to see the yield percentage remain at 1.6, but we’ll see if that holds.

On Tuesday the latest leading indicator for the housing market, New Housing Starts and Building Permits came out. A 1.621 million annual pace was expected for September starts versus the actual that came in lower at 1.555 million. August’s number was much higher than expected. 

Permits came in lower than the 1.728 million expected at 1.589. This number is also following a much higher than expected August reading.

On Wednesday, the Fed’s Beige Book comes out. It is an anecdotal reporting on the health of the US economy from the Fed’s different regions around the country. The Fed uses this data to help in its policy-making meetings, so as you can imagine this report often attracts the interest and attention of markets and traders. 

The latest numbers on Existing Home Sales come out on Thursday. Sales have leveled this year near a 6 million annual rate with 6.030 million the expectation for September.
With mortgage rates increasing and home sales slowing a little, we could be witnessing the calming down of the housing market, which for many buyers could be great news. Keep that in mind if you’ve been on the sidelines and consider your next steps. And of course reach out to me if  you have any questions!