𝗙𝗼𝗿 𝘁𝗵𝗲 𝘄𝗲𝗲𝗸 𝗼𝗳 𝗝𝗮𝗻𝘂𝗮𝗿𝘆 𝟭, 𝟮𝟬𝟮𝟰

𝗟𝗮𝘀𝘁 𝗪𝗲𝗲𝗸'𝘀 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗥𝗮𝘁𝗲 𝗥𝗲𝗰𝗮𝗽: 𝗥𝗮𝘁𝗲𝘀 𝘂𝗻𝗰𝗵𝗮𝗻𝗴𝗲𝗱 👍

Mortgage rates were basically unchanged last week as 2023 came to an end.

𝗧𝗵𝗶𝘀 𝗪𝗲𝗲𝗸'𝘀 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗥𝗮𝘁𝗲 𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁: 𝗥𝗮𝘁𝗲𝘀 𝗰𝗼𝘂𝗹𝗱 𝗶𝗺𝗽𝗿𝗼𝘃𝗲 𝘀𝗹𝗶𝗴𝗵𝘁𝗹𝘆 𝘄𝗶𝘁𝗵 𝗵𝗲𝗹𝗽 👍

Mortgage rates will need help from labor market data to improve this week. Signs of a softening labor market in this week's data would support expectations of future Fed rate cuts, which would help mortgage rates to improve at least a little bit. However, if we instead see signs of labor market strength from the data this week it could cause rates to creep slightly higher, especially on Friday.

🗓️ 𝗪𝗵𝗮𝘁'𝘀 𝗮𝗳𝗳𝗲𝗰𝘁𝗶𝗻𝗴 𝗿𝗮𝘁𝗲𝘀 𝘁𝗵𝗶𝘀 𝘄𝗲𝗲𝗸:

- Economic data: This week brings multiple reports about the labor market, starting on Wednesday with the Job Opening and Labor Turnover Survey. Thursday brings the ADP payroll report and unemployment claims, with Friday's new job creation and unemployment numbers being most likely to affect mortgage rates.
- The Fed: Mortgage rates continue to reflect the belief that the Fed will need to cut rates six times in 2024, although Fed officials have been saying it will be less. If markets start to waiver in the belief that the Fed will cut rates dramatically this year to avoid a recession, we could see mortgage rates creep higher.

Last Week's Mortgage Rate Recap:

Rates slightly higher -


Mortgage rates lost a little bit of ground last week as markets started to doubt the Fed will cut its policy rate at the March Fed meeting. Friday's jobs data also pressured rates a bit higher, showing the labor market remains resilient and making it less urgent for the Fed to cut rates to stimulate the economy.


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This Week's Mortgage Rate Forecast:

Rates will move with inflation data -


Mortgage rates are not likely to move much higher or lower from where they start the week if inflation data comes in as expected. However, a report that shows inflation is dropping faster or slower than expected could cause rates to move up or down a bit depending on the news.


What's affecting rates this week:



• Economic data: Consumer and wholesale inflation reports come out near the end of the week, and will help set the direction of mortgage rates for the next couple of weeks.
• The Fed: Mortgage rates continue to reflect the belief that the Fed will need to cut rates six times in 2024, although Fed officials have been saying it will be less. If markets start to waiver in the belief that the Fed will cut rates dramatically this year to avoid a recession, we could see mortgage rates creep higher.

Last Week's Mortgage Rate Recap:

Rates slightly lower -


Mortgage rates improved a little bit last week, even though the consumer inflation numbers came in slightly higher than expected. Wholesale inflation was down, but doesn't have as much influence on mortgage rates.


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This Week's Mortgage Rate Forecast:

Rates may improve -



Mortgage rates could see some more improvement this week if markets continue to bet on Fed rate cuts to start at the March meeting. Despite labor market and economic data that points to the Fed keeping policy rates at current levels, markets believe the Fed will have to start cutting much sooner than it expects if it wants to avoid a recession. Rates are unlikely to move higher unless that belief falters.



What's affecting rates this week:



• Economic data: A holiday shortened week brings Wednesday's retail sales data and the Fed's Beige Book on the economy. Not much other data to worry about this week.
• The Fed: Mortgage rates continue to reflect the belief that the Fed will need to cut rates six times in 2024, although Fed officials have been saying it will be less. If markets start to waiver in the belief that the Fed will cut rates dramatically this year to avoid a recession, we could see mortgage rates creep higher.

Last Week's Mortgage Rate Recap:

Rates moved higher -


Mortgage rates are heavily influenced right now by speculation of when and how much the Fed will cut its policy rate this year. Last week mortgage rates moved higher as markets started to give up on the idea that the Fed will have to start cutting its rate in March to head off a recession.



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This Week's Mortgage Rate Forecast:

Rates could creep higher -


Although starting the week off a little bit better than Friday, mortgage rates could move higher this week if we continue to see markets give up on a March Fed rate cut. The likely best case scenario is that rates hold steady, because it is unlikely they will improve much from here this week.



What's affecting rates this week:



• Economic data: Thursday brings the preliminary 4th qtr GDP, along with unemployment claims. Friday we get the PCE inflation data, the Fed's favored inflation gauge, which could influence rates to end the week.
• The Fed: Markets have been pricing in a Fed rate cut in March the last few weeks, which helped mortgage rates fall from October highs. However, markets are finally listening to Fed members who say a March cut is unlikely, causing rates to creep up, but there is room for rates to move higher yet.

Last Week's Mortgage Rate Recap:

Rates slightly higher -


Mortgage rates moved just slightly higher last week, but not by much. Inflation cooled to an almost three-year low, and that is a good sign for future mortgage rates to come back down.



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This Week's Mortgage Rate Forecast:

Rates could be volatile -


The week will start off quiet and mortgage rates are unlikely to change much until Wednesday, but then the fireworks start when the Fed releases its policy statement and Chair Powell holds his press conference. We also could see more rate movement on Friday when jobs data comes out.



What's affecting rates this week:



• The Fed: The Fed is expected to leave its policy rate unchanged at this meeting but markets will be looking for signs about when cuts will begin, especially Wednesday afternoon during Powell's press conference. If traders think Powell is leaving the door open for rate cuts sooner, we could see mortgage rates improve. However, if Powell ruins any hope of cuts starting at the March meeting, mortgage rates may move higher.
• Jobs data: Although there are a few different labor reports during the week, Friday's jobs data will have the most effect on mortgage rates. Labor market weakness will help rates, strength will hurt them.

Rates are in a bit of a free fall again this week, after they jumped up a bit in previous weeks. Now is a good time!

Last Week's Mortgage Rate Recap:

Rates moved higher -


Mortgage rates actually improved last week after the Fed meeting and press conference on Wednesday, but saw the gains disappear when Friday's jobs data came in crushing expectations with almost double the new jobs created than was forecast. Mortgage rates ended the week slightly worse than the previous week.


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This Week's Mortgage Rate Forecast:

Rates likely to move higher -


This week rates are likely to move higher as markets give up on a March Fed rate cut and start to question if we will even see one at the next meeting in May. Mortgage rates will creep higher if markets believe that the Fed will not cut until later in the year, and the strong economic data and labor market data we've seen the last few weeks makes it unlikely the Fed will need to cut rates to stimulate the economy anytime soon.



What's affecting rates this week:



• Economic data: There is no economic data this week that is likely to either push mortgage rates higher or lower.
• Fed speakers: There will be members of the Fed speaking every day this week, sharing their opinion on when the Fed should start cutting rates. Mortgage rates will creep higher if markets believe the Fed will not cut until later in the year.

Here is a quick blog I wrote discussing the potential costly pitfalls of delaying your home purchase amidst rate drop speculations.




Dreaming of a new home? It's an exciting journey, but some potential homebuyers are hitting the pause button, anticipating a drop in mortgage rates and a more favorable buyers market later in the year. However, before you decide to wait it out, let's explore why this might not be the wisest strategy.

* The Temptation to Wait:

It's only natural to want the best possible deal when making a significant investment like buying a home. The lure of lower interest rates and a perceived buyers market can be tempting, leading some to postpone their home purchase plans. After all, who wouldn't want to save a bit more or secure a better deal?

* The Rising Tide of Demand:

While waiting for rates to drop might seem like a savvy move, consider the impact of delayed decisions on the overall market dynamics. According to the National Association of Realtors (NAR), for every 1% decline in interest rates, approximately 5 million new buyers enter the market. This surge in demand can create a domino effect, putting upward pressure on home values.

* The NAR Statistic: A Game-Changer:

Let's break down the NAR statistic. If rates do drop, and more buyers flood the market, the increased competition can lead to higher home prices. In essence, the very strategy of waiting for a buyers market might contribute to the creation of a sellers market, with increased demand driving prices northward.

* Timing the Market: A Tricky Business:

Attempting to time the real estate market perfectly is a risky game. The housing market is influenced by numerous factors, including economic conditions, employment rates, and unforeseen global events. Predicting the exact moment when rates will hit their lowest or when the market will shift in favor of buyers is challenging, if not impossible.

* The Cost of Waiting:

Beyond the potential financial implications of rising home prices, there's also the opportunity cost of waiting. Each passing day is a missed opportunity to build equity, enjoy the benefits of homeownership, and invest in a property that could appreciate over time.

* Conclusion: Seizing the Opportunity Today:

In the dynamic world of real estate, one thing is certain: change is constant. Rather than trying to time the market, it's often more prudent to focus on your personal financial readiness and the long-term benefits of homeownership. Locking in a mortgage at today's rates might just be the smart move, ensuring you secure a home that aligns with your needs and aspirations.

As the saying goes, "The best time to buy a home was yesterday; the second-best time is today." Don't let speculation about future market conditions keep you from making a decision that could shape your future. Consult with a real estate professional, assess your financial readiness, and consider the broader implications of waiting. The perfect home might be waiting for you now, not later.

Last Week's Mortgage Rate Recap:

Rates moved higher -


Mortgage rates crept just slightly higher last week, but didn't move much throughout the week as markets waited for this week's inflation data.


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This Week's Mortgage Rate Forecast:

Rates will react to inflation data -



This week rates could move either way, depending on how the inflation data comes out. If inflation moves lower, markets will expect the Fed to react by cutting rates sooner this year and that would help mortgage rates move lower this week. However, if the inflation readings don't come in low enough, it could spook markets to listen to the Fed's message that it wants to hold rates longer, and that would push mortgage rates up as much as .25%.



What's affecting rates this week:



• Economic data: Tuesday brings the most important consumer inflation data, with retail sales data on Thursday and wholesale inflation on Friday. The inflation data will be affected by new factors used in seasonal adjustments, making it harder than normal to forecast what we may get for readings.
• Fed speakers: There will be more members of the Fed out speaking this week, and depending on how the data comes out they could have more of an effect on mortgage rates for the week.

Last Week's Mortgage Rate Recap:

Rates moved higher -


Mortgage rates moved higher again last week, this time due to inflation coming in higher than expected. Inflation is not good for rates, and the report was made worse because it makes it unlikely the Fed will consider cutting rates till at least May and more likely June.


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This Week's Mortgage Rate Forecast:

Rates may creep higher -


This week is likely to see mortgage rates move slightly day-to-day and possibly creep a bit higher by the end of the week. Rates will not drop significantly from here until we see some data showing the labor market and economy is weakening and inflation is falling, and we won't see that data until at least March.



What's affecting rates this week:



• Economic data: The minutes from last month's Fed meeting come out on Wednesday along with some economic reports on Thursday. There is nothing on Tuesday or Friday, and markets were closed on Monday.
• The Fed: Mortgage rates are not set by the Fed, but are strongly influenced by Fed actions. Rates were lower when markets were forecasting Fed rate cuts to start in March, and have moved higher as the chances of that happening have grown slim. Speculation now calls for Fed rate cuts to most likely start in June.

Last Week's Mortgage Rate Recap:

Rates were unchanged -


Mortgage rates crept higher through the week last week, but a strong performance on Friday helped to end the week basically unchanged. Faced with the current rate climate, that's a win for the week.



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This Week's Mortgage Rate Forecast:

Rates could move higher -


This week there's a lot of economic data that markets will be watching that could push mortgage rates higher. If the economic data points to a strong economy, that means it is less likely the Fed will cut rates anytime soon... and that means mortgage rates will suffer for the week.



What's affecting rates this week:



• Economic data: This week has a full calendar, with reports every day as well as Treasury auctions through the week that could influence markets and affect mortgage rates. The biggest reports come out Thursday and Friday.
• Month's end: The underlying markets that set mortgage rates could be affected by traders positioning portfolios for month's end.
• The Fed: Rates hit their recent best levels in December when markets thought the Fed would be forced to cut in March or May to avoid doing damage to the economy, but mortgage rates have moved higher now that markets are speculating the Fed won't cut till June or even July.

Last Week's Mortgage Rate Recap:

Rates were unchanged -


Similar to last week, mortgage rates moved slightly higher through the middle of the week before dropping back on Thursday and Friday to end the week unchanged.


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This Week's Mortgage Rate Forecast:

Rates could improve but there is risk -


It may be overly optimistic, but we think rates could improve this week with some help from labor market data and the Fed. However, this data could also push rates higher if it comes in showing a stronger labor market and economy. Remember, mortgage rates can only move lower once markets anticipate Fed rate cuts are more likely to come earlier in the year in June or possibly May, which is not the case right now.



What's affecting rates this week:



• Economic data: This week is full of labor market data, starting on Wednesday and wrapping up with Friday's big BLS jobs report. Last month's BLS report showed unexpected labor market strength and sent mortgage rates moving higher through February. Hopefully this month we see revisions to last month's data that shows a much softer labor market.
• The Fed: Fed Chair Jerome Powell will testify in front of Congress this week, as he does twice a year. His comments Wednesday could affect mortgage rates this week.

Last Week's Mortgage Rate Recap:

Rates improved -



Mortgage rates remained unchanged for much of last week, moving lower Thursday and Friday on economic and labor market data. Although more jobs were created last month than expected, prior months were revised to have less jobs created than originally reported, with higher unemployment and lower wages in February.



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This Week's Mortgage Rate Forecast:

Rates will be volatile and could move higher -



This week has a few rate moving reports, with Tuesday's inflation data being the biggest. If you are in process with a mortgage application, you may want to talk with your mortgage pro about locking Monday ahead of this data. There is less risk for loans closing April or later.



What's affecting rates this week:



• Inflation data: Tuesday AM brings the CPI inflation data, and traders anticipate it could come in showing inflation continued to heat up in February. Last month's report showed hotter inflation, and mortgage rates moved higher and didn't fall again for three weeks. Thursday brings wholesale inflation, which has much less effect on rates.
• Other economic data: Thursday and Friday bring other economic reports like consumer sentiment and retail sales that could influence mortgage rates to end the week.


Overall, rates have been falling well. I have been in the low 6's on FHA, USDA & VA loans in most cases, and even into the 5's in some cases. This is all dependent on credit scores, loan amounts and other factors of course. Conventional rates are a bit higher, bt you don't have the different government funding fees they charge.

Last Week's Mortgage Rate Recap:

Rates moved higher -


Mortgage rates moved quite a bit higher last week, giving up all of the gains seen earlier in March. Rates moved higher due to hotter inflation and strong economic data that make it much less likely the Fed will need to cut rates anytime soon.



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This Week's Mortgage Rate Forecast:

Rates will be volatile and could move higher -



This week has the potential to open the door for rates to move even higher, or to settle back down a bit, depending on how Wednesday's Fed meeting and press conference play out.



What's affecting rates this week:



• Fed meeting: Wednesday at 2pm ET, the Fed is expected to leave policy rates unchanged, but will signal what may come at future meetings in its policy statement.
• Fed rate forecasts: At this meeting, Fed members will make their anonymous forecasts for where policy rates will end this year and the next few years. The last projection was for three Fed rate cuts in 2024, and if that falls to two cuts it could pressure mortgage rates higher.
• Powell press conference: Fed Chair Jerome Powell's press conference at 2:30pm ET Wednesday is likely to cause volatility in mortgage rates, causing lender repricing and setting the direction for rates over the next few weeks.

Last Week's Mortgage Rate Recap:

Rates improved -


Rates actually improved last week when the Fed continued to project three rate cuts for 2024 and more to come in 2025. The Fed also signaled that it wasn't yet concerned with the recent uptick in inflation and still felt that it would have no need to raise rates further in this tightening cycle, and left its policy rate unchanged.


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This Week's Mortgage Rate Forecast:

Rates may improve -



This week is a holiday shortened week that is unlikely to see rates make any significant moves, but we could see slight improvement. The latest trend is that rates may slowly improve ahead of April's labor and inflation data, as markets start to see a June Fed rate cut as more likely after the latest Fed meeting.



What's affecting rates this week:



• Economic data: Although there are some mid tier economic reports that will come out this week, the PCE inflation data comes out on Friday when markets will be closed for Good Friday and we are not likely to see a reaction to that data until Monday. It is unlikely rates move much on this week's data.
• Holiday weekend: Markets close early on Thursday and will be closed on Friday, meaning that most lenders will not change rates after Thursday until next week.