Market Update:
Rates Unchanged and Inflation as Expected; Existing Home Sales Coming Up This Week
Mortgage rates trended slightly higher in the beginning of last week in preparation of the release of April’s consumer price index on Wednesday. Following the release, which revealed numbers that were exactly in line with expectations, rates started trending lower. They trended lower again on Thursday thanks to weaker data from certain economic reports. Weaker economic data = better for bonds = better for rates. As bond price increased, rates typically decrease. On Friday, however, bond prices fell, which influenced rates slightly.
This week holds several housing reports scheduled for release, including housing starts, building permits, the National Association of Home Builders’ (NAHB) housing market sentiment index, and the existing home sales data from April. Existing home sales decreased slightly in March following a big 14.5% monthly jump in February. Home builder sentiment has been increasing steadily for the past several months and is expected to remain stable in May. Building permits are expected to increase and housing starts are expected to slip slightly.
As we move closer to summer, more economists’ predictions are starting to trickle out for the upcoming months and rest of the year. Several experts are predicting that inflation will continue cooling and rates will start trending lower. They’re largely expecting the personal consumption expenditures (PCE) index coming up to remain stable, like the CPI. Next month, we should start to see those numbers coming down.
Sources: Bloomberg, Mortgage News Daily