Weekly Mortgage Rate Update- 11-19-2024
Last week’s inflation reports show it will not go gentle into that good night.
Inflation, Inflation, Inflation
Sort of like Marsha, Marsha, Marsha, we are tired of discussing it. (I hope younger readers get this reference). Of course, we are in the business of selling real estate which is a great hedge against inflation and reminding clients that locking in your largest expense-shelter with a 30-year mortgage is one of the best financial moves you can do. Over time the benefit becomes apparent. We can point our clients to the fact that the rate of inflation increasing may have slowed down, but it hasn’t reversed the price increases over the last few years, and is still rising.
Here is a chart that helps paint the picture, courtesy of MBS Highway. The red line is the yearly changes in inflation which you do see a lot of movement up and down, but that blue line is the cumulative inflation rate that steadily increases. Point being inflation accumulates; it doesn’t go away. Lock in your housing expense as soon as possible is the starting point to building wealth.
CPI came in as expected
Headline CPI ticked up to 2.6%. Core CPI (excludes food and energy) is still stubborn at 3.3% annual pace with the main culprits being shelter expense at 4.9% and core services at 4.8%. Of concern is that the 3 month rate of inflation has ticked up to 3.50%. Inflation is not going down, this is the 53rd month of increases in a row.
Powell said they aren’t in a hurry to lower the Fed rate
Last week Powell said they aren’t in a rush to cut the Fed funds rate with the economy plugging along ok and inflation still too high. He said they will be “deliberate, not aggressive.” We are a far cry from the September rate decision to cut .50% when the thought was that maybe they had waited too long to cut rates and acted aggressively. The next move all hinges on the Jobs data that will hit the first of December.
Careful what you wish for
This morning mortgage rates getting a little lift from escalating tensions between Russia and Ukraine with money flowing to bonds in a “risk off” trade that helps mortgage rates. Let’s hope risk of nuclear war isn’t the path to lower rates. Besides this, not a lot of major reports hitting till the first two weeks of December. Think rates are just going to hang around here till then unless there is an unexpected development. No update next week for the holiday shortened week. Have a great Thanksgiving!
This Week’s Rates
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.875% |
6.125% |
6.125% |
6.25% |
|
APR |
7.036%* |
6.269%* |
7.135%** |
6.399%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 11-19-2024. 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
* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.