Been a while, but it’s great to say the mortgage rates just dropped ½%. The newly released Consumer Price Index (CPI) showed that overall inflation increased by 0.4% which was 0.2% below expectations, and year-over-year inflation declined from 8.2% to 7.7%. The market was targeting 8.0%.
I’ve said it a million times, the mortgage rate released by the media is obsolete. Freddie Mac releases their press release on Thursday that calls out the rate from the week before. Per the release today the 30 year rate rose to 7.08% from 6.95% the week prior. Today the rates are lower…
The rates have been very volatile. Rates can literally change a couple of times a day. As you can see in the attached chart of the 30 year fixed mortgage over the past few months rates have gone from 5.05% on August 1st , up to 7.37% on October 20, today November 10 6.67%.
During the last Fed meeting, it was conveyed the Fed Funds rate needs to be sufficiently above neutral, and restrictive for a longer period to make sure inflation doesn’t come back, once it comes down to an acceptable range. The Fed’s target is 2% for inflation. One good CPI number won’t stop the Fed from increasing the Fed Funds rate again in December. Depending on the CPI number released just before the next meeting, it may keep them at a .5% increase instead of another .75% increase they’ve done over the past 4 meetings. Then they may keep it at that rate for a year or so as they know there’s a lag of several months for the Fed Rate changes to take full effect, and we have to keep our eyes open for a recession. If we go into a recession, mortgage rates can get better, regardless of what the Fed does.
The 10 year note dropped from 4.23% at the beginning of this week to 3.84% this morning. Because of the volatility, we’ll see where it ends up in a few hours.
Over just a few days the futures markets target for the projected terminal Fed Funds Rate dropped from 5.3% to 4.8%.
Feel free to check with me what the rates are doing ”In real time”. I’ve always got my eyes on them.
Also, not all lenders are created equal. Some have better rates and programs, and some are going out of business. As a mortgage broker, I also have to keep my eyes on who’s still going to be in biz next week. After 35+ years in the business, I’ve ridden this rodeo several times. The economy, housing, and mortgage market are turbulent today but will be in fine shape when this reset shakes out.
Ron Henderson GRI, SRES, SFR, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
If you are in the Los Angeles area and have any questions or real estate sales or financing needs, feel free in contacting me
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