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.
RATE LOCKS RISE IN JANUARY
Below are January Mortgage Origination stats from Black Knight,
with corresponding article: https://www.blackknightinc.com/black-knights-january-2023-originations-market-monitor/
- 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.
Here is the audio and some of my favorite slides below: https://files.mykcm.com/mmr/en/2023/02/mykcm/KCM-02-23.mp3