Rates Cool For Second Week

Average mortgage rates declined for a second week as inflation moderated in the Fed’s preferred inflation indicator. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.02%, down from the week prior’s 7.09%. A year ago at this time, the 30-year FRM averaged 6.39%. The 15-year also fell, down from last week’s 6.38% to 6.28%. A year ago at this time it was 5.75%. “Mortgage rates decreased for the second consecutive week,” said Sam Khater, Freddie Mac’s Chief Economist. “Given the news that inflation eased slightly, the 10-year Treasury yield dipped, leading to lower mortgage rates. The decrease in rates, albeit small, may provide a bit more wiggle room in the budgets of prospective homebuyers.” Even a…

Applications Slip Again Ahead Of FOMC Meeting

Mortgage applications declined again last week as rates continued their upward march.  The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — fell by 2.3%, adding to last week’s 2.7% dip. Adjusted purchase applications slipped by 2%, while the unadjusted index was down 1% and 14% lower YOY.  Rates jumped to 7.29%, their highest point since November 2023. “Inflation remains stubbornly high, and this trend is convincing markets that rates, including mortgage rates, are going to stay higher for longer,” said Mike Fratantoni, MBA’s SVP and Chief Economist.  As buyers desperately seek ways to lower their monthly payments, ARMs clocked another strong week, accounting for 7.8% of applications.…

Rates Move Down Slightly

Mortgage rates fell last week but remained in the high-6% range. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.79%, down from the week prior’s 6.87%. A year ago at this time, the 30-year FRM averaged 6.32%. The 15-year fixed rate also dropped from 6.21% to 6.11%. A year ago, it averaged 5.56%.  “Mortgage rates moved slightly lower this week, providing a bit more room in the budgets of some prospective homebuyers,” said Sam Khater, Freddie Mac’s Chief Economist.  “We also are seeing encouraging data on existing home sales, which reflects improving inventory. Regardless, rates remain elevated near 7% as markets watch for signs of cooling inflation, hoping that rates will come down further.” Both existing…

Feds Hold Rates Steady As Spring Homebuying Season Begins

By KIMBERLEY HAAS In a move that was not surprising, members of the Federal Open Market Committee held the target range for the federal funds rate steady at 5.25% to 5.5% at their meeting this week. Inflation has eased over the past year but committee members do not believe it will be appropriate to reduce rates until they have gained more confidence inflation is moving sustainably toward 2%, which has been their goal. Federal Reserve Chair Jerome Powell said during a press conference on Wednesday afternoon that inflation may not reach 2% until 2026 but it is likely rates have hit their peak and the committee plans to start dialing them back at some point this year. Powell did not…

Rates Remain Effectively Unchanged At 6.62%

Mortgage rates remained basically unchanged last week as markets adjust to economic expectations for 2024. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.62%, inching up from the week prior’s 6.61%. A year ago at this time, the 30-year FRM averaged 6.48%. This is the first increase since October. Rates have fallen more than a full percentage point since then, giving homebuyers more breathing room as they struggle against record-high unaffordability. The 15-year fixed rate dropped, however, from 5.93% to 5.89%. A year ago, it averaged 5.73%. Freddie Mac Chief Economist Sam Khater ascribed the news to the slow machinations of the market as it “digests incoming economic data.” He pointed out that rates stopped their…

PCE Soars To Four-Month High

The Fed’s preferred inflation measure soared to a four-month high in September, increasing the likelihood of future Fed rate hikes. The personal consumption expenditures price index tracks what Americans buy and for how much, offering a view into their spending habits. The core index, which excludes food and energy components, increased by 0.3% in September.  When adjusted for inflation, consumer spending rose 0.4%. The data comes on the heels of news that the economy grew by 4.9% in Q3 2023, the fastest pace in two years and more than expected. Consumers once again waved off recession fears, but the increase puts the Central Bank in a tough position as it battles inflation. Analysts generally maintain that another increase won’t come…

How The Housing Market Is Affected By Inflation

By ERIN FLYNN JAY Inflation has affected the housing market as higher costs of living puts more stress on the average person’s finances. The average American household spent $709 more in July than they did two years ago to buy the same goods and services, according to Moody’s Analytics. “High inflation of the past 2+ years has done lots of economic damage,” Mark Zandi, chief economist at Moody’s Analytics, wrote in a post on X, the platform formerly known as Twitter. Rick Sharga, President & CEO of CJ Patrick Company, said among other things, inflation makes it harder for renters to save money for a down payment, and as home prices tend to go up over time, the amount of…

Housing Starts Sank In June, But Permits Offer A Glimmer Of Hope

Housing construction declined last month, but the future looks brighter thanks to a bump in permits. New U.S. home construction rose for the first time in six months, according to data from the U.S. Census Bureau. Residential starts fell by 8% to an annualized rate of 1.43 million. This is well below estimates from economists surveyed by Bloomberg, who expected a pace of 1.48 million. Permits for new construction also dipped, down 3.7%% to a rate of 1.44 million. Permits offer an indication of how many homes will be built in the coming months. But on the bright side, single-family construction permits in particular saw an increase, up 2.2% from May to the highest pace since June 2022. Builders continue…

Average Rate Comes Close To 7%

The average interest rates closed in on the 7% mark last week, pushing affordability further out of reach for many Americans. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.96%, up from 6.81% the week prior in the second week of 10+ bps jumps. A year ago at this time, the 30-year FRM averaged 5.51%. The 15-year fixed-rate mortgage shot up as well, from 6.24% to 6.30%. A year ago, it averaged 4.67%. “Incoming data suggest that inflation is softening, falling to its lowest annual rate in more than two years. However, increases in housing costs, which account for a large share of inflation, remain stubbornly high, mainly due to low inventory relative to demand,” said…

June’s Inflation Slip Bodes Well For Homebuyers

Inflation cooled significantly in June, increasing by only 3% YOY, according to the Fed’s preferred inflation measure, the Consumer Price Index. This is down from a 4% increase the month prior and fully a third less than its peak at nearly 9% last year. June’s data suggests it’s possible for the U.S. to make a “soft landing” and reach its 2% inflation target without throwing the economy into recession. But it may yet be too early to celebrate. “This is very promising news. The pieces of the puzzle are starting to come together,” Laura Rosner-Warburton, senior economist and founding partner at MacroPolicy Perspectives, told the New York Times. “But it’s just one report, and the Fed has been burned by…