Weekly Mortgage Rate Update- 03-26-24

The Fed fund rate is the price of money.  It sets the base cost of borrowing on all things, which is why it is one of the factors we focus on in the mortgage rate outlook.  The recent uptick of inflation was the reason mortgage rates increased in recent weeks. As the market had started to question when the Fed might be able to cut rates if inflation is still too high.  After the Fed meeting concluded last week, the markets were reassured that the Fed is still planning cuts this year despite the recent inflation data.  Mortgage rates improved overall last week as a result, now back to the better end of our channel that rates have been bouncing around in for the past few months. 

The dot plot chart of Fed projections issued last week showed most of the Fed members still expecting 3 cuts in 2024, The current market outlook is the first cut to happen in June. This is already priced into current mortgage rates.

The projections also show that the Fed predicts inflation to be at 2.4% by the end of the year with unemployment at 4%.  So the Fed is planning the cuts before reaching their inflation target and before any stress shows up in the unemployment data.  This is reassuring markets of what to expect from the Fed in the months ahead.

This week starts off with rates holding steady.  It’s a holiday week where the bond market closes early Thursday and is closed for Good Friday.  On Friday, the key inflation measure will be released, core PCE.  We won’t see a reaction in rate markets on this report till Monday morning when the bond market reopens.  So, we expect rates later this week and over the weekend to be skewed since lenders will want to protect themselves ahead of this major report and long holiday weekend.  

Loan Type	Conventional 30 year	Conventional 15 year	FHA 30 year	VA 30 Year
Interest rate	6.625%	6.00%	6.125%	6.125%
APR	6.784%*	6.231%*	7.011%**	6.273%***

LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)

RATES ARE CURRENT AS OF 03-26-2024.  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.