Well, wouldn’t you know it, as soon as we start enjoying improved rates as we head into the Spring home buying season, the latest CPI (consumer price index) report spooks the bond and mortgage markets, and rates rise for the week. According to the latest survey of average rates by Freddie Mac, the rate for the 30-year and the 15-year both ticked higher.
In addition to the hotter-than-expected inflation reading, there’s now much more uncertainty of the next moves of the Fed. What we do know is that they will not be cutting rates in their March meeting, as was once thought. So, the uncertainty around the Fed’s next moves and volatile and unpredictable economic readings and there’s going to be increased fluctuations in mortgage rates in the near term.
So, what’s next for mortgage rates? Of course, we don’t know for sure, but as we watch the 10-year Treasury yield percentage, which mortgage rates often follow – as I’ve been writing about these past few weeks – we saw the 10-year yield break above the symbolic and important 4 percent mark. Since that break above 4 percent, the bond market has been trying to reassess pricing, and there’s been increased volatility for mortgage rates, yet we began this holiday-shortened week with modestly lower mortgage rates.
As for what I’m watching this week…
There is sparse high-impact economic data due to be released for the remainder of the week. The minutes from the Fed’s latest meeting will be coming out late Wednesday and will likely attract lots of interest as traders look for certainty about what the Fed’s planning to do with its key interest rate.
As for the housing market, there’s only the latest numbers of Existing Home Sales expected out this week. After December’s 3.78 million annual rate, existing home sales in January are expected to rise to a 3.98 million rate.
If so, that would be consistent with the latest report out by the Mortgage Bankers Association that new applications for home purchases rose 19.1 percent over last year, the highest reading since October of 2023.
I’ll be keeping an eye on all of it for you and report back next week! In the meantime, if you’d like to strategize about your next purchase or any other home financing needs, please feel free to reach out anytime. You can simply send me an email or call/text me at 818.307.6072.
