Jobs + Delta + Inflation = Wild Ride for Rates

It’s been a little bit of a wild ride for rates over these past few days. Last week, before the jobs report was released, the survey of average rates showed the 30-year and 15-year dropping to levels not seen since early 2021. 

However, following Friday’s robust jobs report showing almost 1 million people returning to work and the unemployment rate dropping to 5.4 percent markets and thus rates rebounded some. 

This week the 10-year Treasury yield has continued to rise, which has the capability of pushing rates higher as well. 

Last week we also saw home appreciation rates come in at an impressive 17 percent. Yes, that’s great for homeowners but tough for home buyers; however, consider that rents in the US are also rising by 14 percent over last year. And as we know with rents, you are not building long term wealth like when you own a home. 

The high rate of appreciation and super-low rates also means that you may be able to refinance OUT of mortgage insurance, so get in touch right away and let’s take a look at your specific situation while rates are still so amazing. 

What I’m watching this week…

There’s not much high impact economic data expected out except for two inflation reports, which considering the volatility of rates over the past days, could move markets. 

The first look at inflation comes with the Consumer Price Index. Consumer prices have been substantially exceeding expectations, nearly doubling the consensus in June at 0.9 percent in monthly price gains for both the overall and core rates. July’s expectations are a monthly 0.5 percent increase. Forecasters see the overall annual rate in July at 5.3 percent and at 4.3 percent for the core.

Next, the look at wholesale inflation comes out on Thursday. Not surprisingly, producer prices have been exceeding expectations and did so by a very substantial degree in June, at a monthly 1.0 percent rate. Expectations for the headline monthly gain for July is 0.6 percent.

What do these data points mean for rates? Typically, higher inflation can push mortgage rates higher. I will be keeping an eye on the 10-year Treasury yield percentage, which if it pushes above 1.37 could cause mortgage rates to rise as well.