Video
April 26, 2024
Airs live on YouTube
April 26, 2024
Inflation Has Flatlined... What Does This Mean for Rates?
Market Update
Coming Soon
Follow us on YouTube to watch live!
Have you ever been on a diet and you just can’t shake the last 10 pounds? That’s where we stand with inflation.
The U.S. was able to shed the excess pretty fast. Inflation peaked at 9.1% in June, 2022, and the Fed put us on a strict diet, raising interest rates 11 times starting in March 2022. The Fed Funds rate skyrocketed from .25% to the current rate at 5.5%!
The Fed is most focused on the Core PCE (Personal Consumption Expenditure) to gauge their inflation target of 2%. The Core PCE strips out the volatile food and energy component. The March 2024 reading came in at 2.8% as of the release today which was the same as February 2024. No progress was made.
What’s the hold up on why inflation has gone flatline? The consumer doesn’t want to stop spending! They got used to spending during COVID with the infusion of cash into their bank account. Now they are maxing out their credit cards and spending all their savings! We just don’t know when the coffers will run dry.
So the last 10 pounds of inflation are going to be hard to shed. What does that mean for mortgage rates? Inflation is the nemesis of Wall Street. We'll likely be going - if not up a little bit - through the election.
Here is the opportunity for homebuyers and sellers. It has been talked about almost ad nauseam: when rates go down, home prices will go up. One of the most interesting things we’ve seen this year is that despite mortgage rates going up, the average home price has gone up almost 5% year over year! These rates are not stopping home appreciation.
We have a supply issue with homes and not necessarily an interest rate issue. There are simply not enough homes for sale, and there is enough buyer demand to keep prices steady.
Life happens, and people are tired of waiting. New babies, break-ups, new jobs, retirement, engagements... people need homes for a variety of reasons. Those that become creative, suck it up, and buy now will be rewarded long term.
If prices are going up with higher interest rates, can you imagine how fast prices could potentially go up when mortgage rates actually do come down?!
Featuring:
The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.
Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
.png)
