Rates Higher As Inflation Numbers Come in Higher Than Expected

TODAY’S INTEREST RATES

Interest rates continued to move higher this week.

The Consumer Price Index (CPI) which measures inflation decreased .1% to 6.4%

The Core CPI Rate which takes out food and energy prices went down .1% to 5.6%

Although inflation went down, both numbers were higher than originally expected.

This is likely a component of why rate pricing has gone up over the past week as traders

took a defensive position if the CPI didn’t mean original expectations.

This is a really good article by Mortgage News Daily detailing the current interest rate market:

I still expect rates to go down long term but there will be some bumpiness to the ride.

1/0 and 2/1 buy downs are great options for this rate environment because you are essentially

having the seller prepay for a lower rate and if you refinance/sell before the temporary buydown period is up, you get all funds back you didn’t use.

Call me if you have any questions about how temporary buydowns work.

Have a Happy Valentine’s Day!

FINANCIAL ADVISOR CLASS

I’m really excited for this class taught by Top Financial Advisor Matt Lipscomb.

Please join us tomorrow via zoom at 9 am Arizona Time.

REGISTER BELOW:

https://bit.ly/3GCf0yn

RATE LOCKS RISE IN JANUARY

Below are January Mortgage Origination stats from Black Knight,

Rate lock volumes rose 32% in January driven by declining rates and seasonal tailwinds, snapping a 9-month streak of declines
Purchase (+32%) as well as both rate/term (+37%), and cash-out (+25%) refinance volumes increased proportionally, with refinance locks making up 15% of the month’s overall activity
Optimal Blue Mortgage Market Indices from Black Knight showed 30-year rates dropping 36 basis points to 6.16%, continuing a downward trend that began in November 2022
Despite the improvement, rate and affordability pressures continue to challenge purchase lending, with the dollar volume of such locks down 44% year over year and 14% below January 2020 levels
Purchase lock counts – which exclude the impact of home price changes – were down 41% year over year
Nonconforming loans – including jumbos and expanded guidelines – fell as a percentage of total volumes to just under 10%; conforming (58.5%), FHA (18.5%) and VA (12.4%) all picked up share
The average loan amount rose from $336K to $340K, while the average purchase price climbed from $419K to $421K
Credit scores fell 4 points among cash-out refis – now down 36 points over the past 12 months – and 9 points for rate/terms, but remained relatively unchanged (+1 point) for purchase transactions
The ARM share of lending dropped further in January to just above 8% of total locks, as lower rates pushed borrowers back toward fixed-rate offerings

MONTHLY MARKET REPORT

Keeping Current Matter’s excellent monthly market report is now available.