Weekly Mortgage Rate Update-05-28-2024
It was a slow news week in the rate world. The most interesting item was the release of the minutes from the last Fed meeting. They revealed that members were willing to consider further rate HIKES if progress on inflation doesn’t happen. This caught markets by surprise since Powell downplayed this option in his speech after the May Fed meeting.
Today’s 2 -year and 5-year treasury Note auction was soft with less foreign investors buying. The buyers that did participate required a slightly higher rate. Treasury Notes and Bonds are not Mortgage Bonds, but it pushes up rates across the board and reminds investors of the issue that will plague the rate outlook for some time. With the Fed not buying the debt and foreign investors stepping back, the demand must be stimulated by higher rates of return.
And the supply of debt continues to grow. Currently the US has about a 35 trillion-dollar deficit. Growing at about 3 trillion a year- and we aren’t even in a recession that requires government intervention. Additionally, we are paying about 1.1 trillion a year in just interest payments on the debt.
We don’t expect much to change this week before the PCE inflation report is released on Friday. The expectation is that Core PCE remains at 2.8% for the year with a month over month increase of 0.2%.
Federal Reserve President Neel Kashkari said today that it would require “many more months of positive inflation data” to convince him that the Fed should cut rates once or twice this year.
Rates popped up a bit this afternoon after the weak treasury auction and we have some hedging going on now ahead of Friday’s big PCE release,
|
Loan Type |
Conventional 30 year |
Conventional 15 year |
FHA 30 year |
VA 30 Year |
|
Interest rate |
6.999% |
6.375% |
6.375% |
6.50% |
|
APR |
7.069%* |
6.384%* |
6.984%** |
6.311%*** |
LICENSED BY THE CALIFORNIA DEPARTMENT OF REAL ESTATE LICENSE A division of TYKY (DRE #01919683) (NMLS LICENSE #257773)
RATES ARE CURRENT AS OF 05-28-2024. 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.