Mortgage Rate Update: A Week of Ups & Downs, But It’s Not All Bad!

Let's talk mortgage rates (it’s the number one question I get asked, lol)! It's been a bit of a rollercoaster these past few weeks, and I wanted to give you a quick rundown of what's been happening and what it means for homebuyers.

Remember that big inflation report I mentioned last week? Well, the CPI (consumer price index) report on consumer inflation spooked the markets a bit, sending interest rates trending up to their highest point this year (ouch!). All measures of inflation included in the report were higher than expected. This news pushed back expectations of a rate cut from the Fed, which unfortunately means rates might stay higher for longer.

Also, concerning is that the Treasury Department had to sell $39B of 10-Year Notes. The auction didn’t go well thanks to inflation fears and the government had to offer higher interest rates to the bond buyers, which puts pressure on mortgage rates as well.

The Fed Minutes last week didn’t help either, as the members discussed their concerns about inflation behind the scenes while Fed Chair Powell led markets to believe rate cuts were still coming and inflation was trending in the right direction. As a result, we’re watching the 10-year Treasury level of 4.50 percent. If it stays under, we could see some improvement in rates, but the opposite if it’s over.

But here's the good news: Rates actually started to come down late last week, thanks to some reassuring economic data and comments from the Fed. They're still not back to where they were in early April, but it's a step in the right direction.

Here's the key takeaway: While rates might not drop significantly anytime soon, there's still a window of opportunity for buyers to lock in a good rate. The spring buying season is in full swing, and even with slightly higher rates, homes are still selling! In fact, recent data shows potential homebuyers are adjusting to the new normal.

If you're thinking about buying a home, don't let these recent changes discourage you. Let's chat and see what options are available to you. We can explore different loan programs and find a payment that fits your budget.

As always, I'm here to answer any questions you might have. You’re always welcome to call or text me at 818.307.6072 or simply send me an email.