Weekly Mortgage Rate Update- 02-13-24
This is one of those days where I don’t want to send out the weekly rate update. This morning, CPI (Consumer Price Index) surprised to the upside with higher inflation. +0.3% month over month, giving us a 3.1% year over year average. When removing food and energy core PCE shot up +0.4% for the month to a year over year at 3.9%.
While we have made improvements on inflation, it is still rising faster than the Fed wants. This reading is double the Fed target. CPI is not the Fed’s key inflation measure, that is the PCE report. CPI does weight shelter costs differently than PCE and a big factor in this inflation reading was the Shelter costs as expressed in the owners’ equivalent rent which measures ownership expenses like interest rates, taxes, and insurance- all which have been on the rise.
Later this week we get retail sales reading on Thursday to see how the consumer is doing and PPI (Producers Price Index) on Friday as another inflation measure.
Markets are repricing their Fed rate probabilities. Now most of the market no longer pricing in a March or May rate cut- this change is reflected in the current interest rates. The Fed told us not to expect a cut till later in the year, they may prove to be correct.
For now, markets are still adjusting to the CPI report. The 10 year Note has broken thru a key resistance level at 4.25% and as I type this is at 4.31%. Last time we closed here was November 30th before the market started aggressively pricing in a Fed pivot. As I get ready to hit send to you, we received another reprice to the worse on mortgage rates. I am interested in seeing how markets close today to see if these rates are going to hold at these levels. Hoping this is a knee jerk reaction and we come back down a little over the next few days, I think lenders are pricing in a little extra for the volatility at this moment too.
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.999% |
6.25% |
6.625% |
6.625% |
|
APR |
7.136%* |
6.461%* |
7.420%** |
6.894%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 02-13-2024. SUBJECT TO BORROWER APPROVAL, FICO SCORE, LTV AND PROPERTY TYPE.conv
*APR IS BASED ON ESTIMATED FINANCE CHARGES OF $6935
**APR IS BASED ON ESTIMATED FINANCE CHARGS OF $10,969 THIS INCLUDES FHA MORTGAGE INSURA
NCE PREMIUM
***APR BASED ON ESTIMATED FINANCE CHARGES OF $8343
FEES INCLUDE 1% POINTS, NO Loan Origination Fee , $1095 PROCESSING AND $0 UNDERWRITING FEE
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.