Happy (almost) summer! As we pause this week and take a moment to honor those who served our country on Memorial Day, let’s also dive into the latest news affecting mortgage rates.
The Week in Review: A Tug-of-War – This past week, interest rates saw some ups and downs. Here’s what caused the volatility:
• The Fed’s “Higher for Longer” Stance: Minutes from the Fed meeting revealed they’re unlikely to cut rates soon unless inflation falls significantly. This pushed rates higher globally.
• Mixed Economic Data: Strong earnings reports from companies like Nvidia contrasted with concerns about a potential “hard landing” for the U.S. economy.
• Weak Treasury Auctions: Lower demand for U.S. debt put upward pressure on interest rates.
A Silver Lining for Homebuyers – Despite the recent rise, there are some positive takeaways:
• Rates are still lower than April’s highs.
• Inventory of homes is increasing, giving buyers more options.
• Average mortgage rates briefly dipped below 7 percent last week, according to Chief Economist Sam Khater and Freddie Mac’s weekly survey of rates, offering some hope for affordability.
What to Watch For This Week – The coming days bring key data that could impact rates:
• GDP (gross domestic product): Consensus for first-quarter GDP is 1.5 percent growth versus what was a lower-than-expected growth rate of 1.6 percent in the first estimate.
• Core PCE Inflation: This is the Fed’s preferred gauge of inflation. A lower-than-expected reading could signal a future rate cut.
• Pending Home Sales: Pending home sales in April, which in March rose 3.4 percent to the best level in a year, are expected to rise 0.3 percent.
Other Reports: GDP, Consumer Confidence, and Housing data will also be released and could influence rates.
The Bottom Line:
The economic picture is complex, leading to some uncertainty around mortgage rates. While the Fed’s stance might keep rates higher in the near future, there’s still hope for homebuyers.
Staying informed about upcoming data releases is crucial. I’m always here to answer any questions and help you navigate the home buying process. Let’s chat to see what options are available to you! Reach out to me by email or call/text me at 818.307.6072.
