Mortgage rate update 08-20-2024

Recession fears cooled last week after some stronger economic data and inflation showed some continued moderation. The week’s news taking some of the urgency from the previous thought that rate cuts needed to be swift and deep. Is there a reason to be in a hurry? That’s what we are focused on this week.

In economic news last week the main event was CPI inflation reading for July that came in as expected, increasing 0.2% for the month on both the headline and core reading.  Core CPI is the Fed’s key measure and that now sits at an annual rate of 3.2%.  All the components of inflation came down in July besides shelter and motor vehicle insurance.  If the monthly readings continue this path, we will see the annual rate also come down in the months ahead towards the Fed target.

Retail sales came in much stronger at double the expectations. Relieving some of the fear that the economy is sinking into a recession soon.  

The Key event this week is Powell speaking at the Jackson Hole Wyoming economic conference on Friday.   The weaker jobs data a couple weeks ago sent the market into a tailspin calling for emergency cuts by the Fed, but the data that has followed since hasn’t been as weak, squashing the initial reaction for immediate cuts.  Now markets await Powell’s comments on Friday for a clue on what he thinks of the recent data.  Tomorrow, we get the BLS revisions to the employment data for April 2023 to May 2024.  Keeping in mind that the initial releases have been coming in higher than the final readings it could be interesting tomorrow, and if it surprises then that could once again move the needle and impact the comments from Powell on Friday.

So far this week rates are holding.

Loan Type	Conventional 30 year	Conventional 15 year	FHA 30 year	VA 30 Year
Interest rate	6.125%	5.75%	5.75%	5.75%
APR	6.279%*	6.005%*	6.459%**	5.895%***

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

RATES ARE CURRENT AS OF 08-20-2024.  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.