Housing Market Update | Week of May 6th

This week has some big pieces of data that could drive mortgage rate movements. On Thursday, we’ll get a glimpse into the economy with our Q2 GDP reading, and on Friday we get the Personal Consumption Expenditures (PCE) price index, which is the Federal Reserve’s favorite measuring stick for inflation. While we’re not expecting this data to impact the Fed’s decision in their July meeting, it could solidify the expected rate cut during its next meeting in September. Last Week's Mortgage Rate Recap Rates Were Steady Last week, we didn’t see rates move much. Initial jobless claims rose at the end of the week, which added further confidence in the possibility of a rate cut in September. This week’s inflation data, which we’ll divulge further as we look towards the week ahead, could make that rate cut all but guaranteed if the figures fall in line with expectations. This Week's Mortgage Rate Forecast Rates Could Drop We have a big week of news ahead with Q2 GDP, initial jobless claims, and the all-important PCE report coming in the second half of the week. Currently, the 10-year is trading at 4.22%. With some positive inflation data, we could see yields break below 4.17% which would see rates drop further. Any major movements will be expected at the end of the week as the market prepares for and reacts to Friday’s PCE inflation report. Currently, many homebuyers want to keep their current residence to convert into a rental property as they shop for their next home. Depending on the loan type, there are a few factors that are required to use rental income from that existing property to qualify for a new loan. My team created this co-branded flyer to provide clarity on the different circumstances required to qualify. Take a look at the flyer here and feel free to reach out if you’d like me to co-brand it with your contact info before sharing with any prospective buyers you’re working with!

A big domino fell last week that could be a catalyst for lower mortgage rates long-term. Last Thursday’s Consumer Price Index (CPI) showed that overall inflation had dropped by 0.1%. This is the kind of data that the markets have been waiting for as lowering inflation will only increase the Federal Reserve’s confidence to cut rates this year. This week, we could see rates continue to drop if spreads continue to improve for 10-year treasury yields. Last Week's Mortgage Rate Recap Rates Dropped Slightly Last week, rates dropped slightly as the CPI dropped 0.1% in the July report—a sign that inflation is declining. With signs also showing a slowdown in economic growth, many investors sought safer assets such as government bonds, driving the 10-year yield lower and, in turn, mortgage rates. This Week's Mortgage Rate Forecast Rates Could Be Volatile Coming on the heels of a pivotal CPI report, rates could be volatile this week with the potential to drop lower at the end of the week. On Thursday, we will get the latest initial jobless claims report; if we see continued softening within the labor market, the likelihood of the Federal Reserve cutting rates in September will continue to increase, driving rates lower.

Last week brought notable fluctuations in mortgage rates, landing the 30-year fixed mortgage rate at above 7%. This fluctuation is influenced by economic data suggesting a strong labor market. The good news? We have a big week ahead of us regarding financial data. Depending on the outcome of this week’s inflation reports, we may see significant movement in rates. A low inflation reading could push the Fed to cut rates as soon as September. Conversely, a high report would make it difficult for the Fed to justify cutting rates. Last Week's Mortgage Rate Recap Rates Increased Slightly Mortgage rates saw a slight increase last week as financial data was released throughout the week. The jobs report reflected a healthy economy, pushing them slightly upwards. A closed market on Thursday paused any major fluctuations in the market, and Friday brought rates down marginally. This Week's Mortgage Rate Forecast Rates Could Be Volatile This week’s inflation report could be the most crucial of the year. Markets are eagerly hoping for the Fed to soon cut rates. The fed is looking for inflation data to continue to trend down toward the 2% level to feel comfortable cutting rates as early as September. However, if inflation remains stagnant or increases, you can expect mortgage rates to rise.