Welcome to Homeseed’s Mortgage Market Update, where we dive into the latest trends, insights, and changes shaping the dynamic landscape of the housing and lending industries.
Mortgage Rate Trends & Forecasts
- Mortgage rates increased noticeably on Monday and are higher on a week-over-week basis.
- The increase in rates was due to higher than expected numbers for the S&P and ISM manufacturing indices, which also mentioned higher prices in their reports.
- Prices are crucial due to the persistent inflationary pressures, and if they fail to revert to the downward trend it will make it hard for the Fed to want to cut rates.
Personal Consumption Expenditures (PCE)
- This is the Fed’s preferred measure of inflation and its goal is for the Core reading, which strips out volatile food and energy prices, to be at 2%.
- Last week’s release of data showed that the Core headline reading fell to 2.8%, but the progress lower has been slowing.
- With future data projecting a slow progress towards 2% for Core PCE, it may take weaker labor market data before the Fed cuts rates.
BLS Jobs Report
- March’s job growth roared in above forecasts, as the BLS reported that 303K new jobs were created.
- 68% of the job gains came from three sectors: Leisure & Hospitality (49,000), Government (71,000), and Education & Health Services (88,000)
- Revisions to the data for January and February added an additional 22K jobs to those months combined.
- Unemployment rate declined to 3.8%.
Case-Shiller Home Price Index
- The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices rose 6% year-over-year in its most recent report for January 2024.
- The 6% annual rate is the fastest increase since 2022 and all 20 cities in its composite index saw annual increases for the second straight month.
- Home values are expected to remain supported throughout 2024 as housing demand remains high.
- RATES MOVE HIGHER EARLY IN WEEK – The concern for higher prices and inflation after Monday’s manufacturing data pushed rates higher early in the week.
https://www.mortgagenewsdaily.com/… - ISM INDEX TURNS POSITIVE – A barometer of business conditions at U.S. manufacturers turned positive in March for the first time in 17 months.
https://www.marketwatch.com/… - BABY BOOMERS PLAN TO STAY IN HOMES – More than three-quarters of baby boomers plan to stay in their home as they grow older.
https://www.businesswire.com/… - HOUSING MARKET STAYS TIGHT – New home listings are down to start the Spring market, but competition remains fierce as demand is still high.
https://www.mpamag.com/…