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Jason Obradovich - Chief Investment Officer

Housing Market News & Updates

Translating the complexity of the markets into a concise and easy to digest format. Watch videos, read blogs, and view key data on short and medium term trends impacting interest rates, so you can make the right decision for your situation.

Latest Market Update

Interest Rates Rising Again

Hello everyone. Welcome back to the Mortgage Rundown. Today we are going to talk about what’s happening with interest rates.

Rates go up and rates go down. Just when it looked like rates were going to start dropping again, they have popped back up over the past couple of weeks. Today the 10yr Treasury is right around 4.6% after getting all the way down to 3.8% at the end of last year. 

So, what gives? After all of this talk about the Fed lowering rates in 2024, why are we seeing rates move higher? The short answer is inflation and the employment market. We are still seeing inflation stubbornly high and not moving very quickly towards the Fed’s target of 2%. 

As far as the jobs market is concerned, the unemployment rate is still below 4% and showing no signs of moving higher. If the Fed’s current policy is so restrictive then why aren’t we seeing inflation coming down and the unemployment rate moving up?

The answer is complex. While there are certain areas of the economy that are showing weaknesses, there are other areas such as housing, transportation and health services that are red hot. There simply is too much stimulus in the economy and that makes the Fed’s job more difficult in slowing it down.  There are now some fears that the Federal Open Market Committee (FOMC) rate isn’t high enough and that’s what is pushing rates up right now.

We do have PCE data coming out tomorrow for April which should give us a great gauge on whether or not inflation is moving in the right direction. If the number does go up from March, then we could see another spike in interest rates. If the month-over-month number does go down materially, then we could see the market breathe a sigh of relief and rates might start falling again.

That’s it everyone from the capital markets desk this week. Thank you all for watching and have a great day.

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Previous Market Update

Have Rates Hit Their Highs?

Hello everyone. Welcome back to the Mortgage Rundown. Today we are going to talk about what’s happening with interest rates.

Last week we had another Federal Open Market Committee (FOMC) meeting where interest rates were left unchanged. The overnight rate from the Federal Reserve continues to sit in the range of 5.25 to 5.5% since July of last year. Not a lot came out of the meeting other than the appearance that the Fed will likely NOT raise rates from here and there is still a decent chance they drop rates one or two times before the end of the year.

That was enough to end a four-month losing streak for rates as the 10yr came off the high of 4.7% for 2024.  Right now, the 10yr is a shade under 4.5% and we should see it trade in a tighter range until we get more data on inflation and the jobs market. 

If you look at the chart on your screen you will see the 10yr over the past couple of years. The high was 5% in October of last year and the high for 2024 was that 4.7% mentioned earlier. Could this be the beginning of rates trending lower finally?

The Future of Rates

Looking ahead we do have CPI data coming out next week for April. We expect the headline number to be flat to slightly down and hopefully the core number does drop from last month. If that is the case, then this could be the beginning of a long slow drop in rates; with the high watermark for rates now behind us.

That’s it everyone from the capital markets desk this week. Thank you all for watching and have a great day.

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