After spiking mid last week, rates lowered once more by the beginning of the week (more on this later). As it stands, the 30-year fixed rate mortgage is steady at 7.15%. Meanwhile, the 15-year mortgage is up 17 basis points at 6.55%.
The Federal Reserve has been holding rates hostage until they received specific messages from the economy (like a weak jobs report or lower inflation levels), but this may not be the case for much longer. Last week, short-term Treasury yields started to increase at an accelerated rate. Upon short-term yields increasing, long-term yields also began to surge, a very unusual occurrence. What this indicates is the market’s unwillingness to go along with the Fed’s monetary plans. As a result, the bond market was in a frenzy up until Friday morning when Fed Mary Daly commented that they would be moving cautiously in order to avoid overtightening and may shift to a flat policy rate. After all, unemployment and inflation are both lagging variables, meaning they don’t predict future events, but rather confirm patterns that are already in progress. After these comments were released, bond yields and mortgage rates dropped back down to last week’s levels again. On the real estate side, more buyers have been turning to new builds. This is largely due to availability. To put it in perspective, the number of new homes for sale jumped 25% since last year while the number of existing homes on the market has largely stayed the same. However, what may be helpful to all buyers though is the FHFA’s announcement that it would cut upfront costs along several buyer categories while increasing costs for cash-out refinances.