Weekly Mortgage Rate Update-06-18-2024
According to CPI released last week inflation was mostly flat in May. The headline number didn’t increase at all coming in at 0.0% vs 0.1% expected and core CPI increased 0.2% while expected at 0.3%. Core year over year is 3.4%.
It’s what we wanted to see. Rates improved after the release, but no real follow through on the improvements after the FOMC meeting concluded shortly after the CPI reading. As expected, there was no rate change at this meeting, but the economic projections that we haven’t seen since March showed some shift in the outlook from the Fed. More Fed members moved from the 2 rate cut consensus to the majority now projecting 1 or no cuts in 2024. The inflation forecast also increased slightly on their projections. At the press conference after, Powell dodged committing to any path going forward and parroted his previous statements about being data dependent.
With regards the employment data Powell said” there is an argument to be made that the payrolls may be overstated.” Significant that he acknowledged the issues with the data they rely on to make decisions on policy. Meanwhile we have seen an uptick in weekly jobless claims.
Today retail sales came in soft again for the 2nd month in a row at 0.1% increase vs 0.2% expected and April revised lower to -0.2%. Excluding autos and with the April revisions, we have retail sales negative 2 months in a row.
There is reason to be optimistic that relatively lower rates are ahead. We are just at the beginning stages of seeing the economy slow and now hopefully, this May inflation reading will also become the start of the trend towards lower inflation. Also of note, the past few bond auctions have been stronger as geopolitical concerns and a slower economic outlook cause money to move to the safety of bonds . As uncertainty grows before our own elections, that will continue to be a factor for better pricing.
We need more data to fuel any more improvements and this week is pretty light on news that can do that. But we are back in that better end of trading channel that we have been in a few times this year.
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.625% |
5.875% |
6.125% |
6.25% |
|
APR |
6.78%* |
6.13%* |
6.86%** |
6.31%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 06-18-2024. SUBJECT TO BORROWER APPROVAL, FICO SCORE, LTV AND PROPERTY TYPE
*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.