PCE INFLATION, FED DECISION, AND HOME INVENTORY RATES

Rates are SLIGHTLY LOWER?as we end the week!? Check em' out and then read our 30 second commentary below.?Rates are averages / examples for network use only: Pricing as of 1/31/2025 at 12:42 PM.

PCE INFLATION, FED DECISION, AND HOME INVENTORY RATES

Mortgage rates ended the week a bit lower than last Friday. However, homebuying demand remains weak, with mortgage applications down 7% from a year ago, according to the Mortgage Bankers Association. Homes are also selling at the slowest pace in five years, with listings sitting on the market for an average of 54 days before going under contract, per Redfin. It's a great time for many home shoppers looking to break in with less competition than we have seen in the most recent 1-2 years.

Inflation Update Inflation closed 2024 on a strong note. The personal consumption expenditures (PCE) price index rose 2.6% in December, slightly higher than November. Core PCE, which excludes food and energy, remained at 2.8%. The Fed targets 2% inflation, a level not seen since early 2021.

Fed officials are cautiously optimistic. Chicago Fed President Austan Goolsbee said the PCE data was "even a little better than expected," while Fed Governor Michelle Bowman believes inflation will ease through 2025 but urges patience before adjusting interest rates further.

Fed Holds Rates Steady On Wednesday, the Federal Reserve kept interest rates unchanged as inflation remains above its 2% target. While the Fed’s rate doesn't directly impact consumer borrowing, it influences mortgage and savings rates.

Housing Market Trends Despite slow sales, housing supply is increasing. Realtor.com reports a 37% jump in new listings in January compared to December. Whether this boost in inventory will help affordability remains to be seen as we head into a more demand heavy spring season.??

Stay tuned for more updates next week!

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