POST TAGSMarket Updates
Blog posted On June 26, 2023
Mortgage rates showed relatively little volatility last week, fluctuating up and down and ending the week at a slightly lower level. There weren’t any extraordinarily large swings in rates despite the confirmation from Fed Chair Powell that they will likely have a couple more rate hikes this year. Other big news last week included the huge surge in housing starts in May. Some experts claim this news would have caused more rate volatility earlier in the year but they’re showing more resiliency at this point. The trajectory of rates and rate hikes will largely depend on one key economic factor.
“Interestingly enough, the additional hikes are not seen happening in response to some additional upward momentum in inflation or economic growth,” notes Matthew Graham of Mortgage News Daily. “Rather, the Fed's baseline expectations call for continued cooling in the labor market, modest economic growth, and continued cooling in inflation. In other words, inflation and the economy have a very low bar to justify a few more rate hikes.” Basically, all eyes are largely on the labor market, secondarily on inflation. The labor market suddenly deteriorates (which is unexpected), then could consider fewer than two hikes (and maybe even cutting rates sooner). Conversely, if things heat up more than expected, there could be more than two hikes.
Some factors that could affect mortgage rates this week include new home sales, which are expected to stay fairly unchanged, and Thursday's pending home sales index, which is expected climb 0.2% month-over-month.
As always, let us know if you have any questions about recent right movement and how it could affect your mortgage.
Sources: Mortgage News Daily