Mortgage rates are on the rebound despite encouraging inflation data, as Fed policymakers stick to 'higher for longer' strategy until they see more conclusive evidence economy has cooled
Purchase loan applications have surged for 2 weeks in a row, but rates for conforming mortgages are inching back up toward 7% this week as investors weigh the odds of Fed rate cuts
Key Fed inflation metric expected to drop June 28 following unexpected decline in May wholesale prices and jump in weekly jobless claims to 242K workers, highest level since August 2023
Policymakers now envision making just one rate cut this year, but investors who fund most mortgages are still betting the central bank will change its tune if inflation continues to ease
Rates have returned to last week's levels, when applications for purchase loans leapt by 9% from the week before and refi applications surged by 28%, MBA lender survey shows
Employers added 272,000 jobs in May, far exceeding the consensus view among economists that payrolls would rise by 180,000 and the average of 232,000 over the past year
In less than a week, a series of reports has changed the outlook for the timing and magnitude of future Fed rate cuts, sending mortgage rates into a 5-day tailspin back below 7%
Mortgage rates have some room to come back down in June after PCE price index shows annual inflation easing to 2.65% in April, and Q1 2024 GDP growth revised downward to 1.3%
Bond market investors shrug off Federal Reserve Governor Christopher Waller's warning that he wants to see 'several more months of good inflation data' before cutting rates
Homebuyers have yet to respond in force to drop in rates, which have been in retreat from 2024 highs for 3 consecutive weeks following Fed easing and soft jobs and CPI reports
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Some borrwers were quick to spring into action, with applications for purchase loans rising by a seasonally adjusted 2% and requests to refinance up 5% week over week, MBA survey shows
Rates have been in retreat as bond market investors who fund most mortgage loans react to the latest economic news and scaleback in 'quantitative tightening' by Fed policymakers
Requests for purchase loans dropped by 1% last week compared to the work before and were off 15% from a year ago, according to the latest Mortgage Bankers Association lender survey
Rates for conforming loans pushed through 7% last week and continue to rise, as latest inflation data and remarks by Fed Chair Jerome Powell dim prospects that Fed will ease in June