Weekly Mortgage Rate Update- 07-30-2024
The much-anticipated PCE inflation reading came and went without much of an impact. It was a tame reading but slightly hotter than the May reading. Headline PCE came in at 0.1% increase for June, May was 0% increase. The Core PCE report is the Fed’s main measure and that came in slightly higher than expectations at 0.2% for the month and the annual pace at 2.6%. Expectations were a 0.1% increase and annual pace dropping to 2.5%. If inflation does continue to moderate as it has the past few readings, the annual pace will continue to tick down. Currently the 3 month pace is at 2.3%. Inflation is headed the right direction.
GDP for the 2nd quarter came in double the expectations at 2.8%. Normally a strong economic reading like this would have moved rates higher but they didn’t budge. Most of the boost to GDP came from consumer spending and Business investment in the automotive sector. Before this reading some thought the Fed might do an emergency cut at this weeks Fed meeting. This stronger data snuffed out that conversation. The Fed continues to not have to be in a rush to cut.
Despite the stronger GDP reading, there are signs of stress in the economy. While every market is different and ours seems to be faring better than most, nationally June showed housing inventories are rising in both existing and new homes. More telling is that the rise in inventory is due to a decrease in buyer demand more so than a rise in sellers. New home inventories rose to a 9.3 month supply, all while builders are already offering below market rates. The Fed pays attention to housing. Higher rates are meant to put a cap on inflation, including home prices and lower rates are meant to put a floor on decreases.
There is no shortage of market moving news this week. Tomorrow the July FOMC meeting ends where markets will be looking for a signal from the Fed that the first rate cut will be September and what the forward guidance is. Currently over a 90% chance of a September rate cut is being priced in. Any change in this outlook for more cuts or less will adjust rates accordingly. Friday, we get all the job numbers for July to see how employment is faring.
The 10 year Note that we watch closely is now below 4.20%. It hasn’t been able to hold below this the last few times its attempted. If it does following this weeks news, then we would expect mortgage rates to follow suit. But hey. we aren’t complaining. These are the best rates we have quoted since March.
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.50% |
5.875% |
6.00% |
6.125% |
|
APR |
6.78%* |
6.13%* |
6.74%** |
6.26%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 07-30-2024. 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.