Mortgage rates have stabilized but may decrease before the release of a significant inflation report. The upcoming Consumer Price Index (CPI) report could impact rates, with focus on the core month-over-month number.
Mortgage Rates Remain Steady with Potential Decrease Ahead of Inflation Report
Mortgage rates have stabilized after reaching their highest levels in over a month. However, there is a possibility of a slight decrease in rates prior to the release of a significant inflation report. This article will explore the factors contributing to the current stability and the potential impact of the upcoming Consumer Price Index (CPI) report.
( Credit to: Mortgagenewsdaily )
Last week, there was a notable increase of 0.41% in the average conventional 30-year fixed rate. However, the following day saw a correction of 0.08%, and since then, the day-to-day change has been limited to just 0.02%. This suggests that the market has found some stability, but it remains to be seen whether this trend will continue.
The Significance of the Consumer Price Index (CPI) Report
The Consumer Price Index (CPI) report is scheduled for release on Tuesday morning and is considered the most important inflation report of the month. It is one of the two major economic reports, alongside the jobs report. The jobs report from last week triggered the 0.41% jump in mortgage rates.
While it is uncertain whether the CPI report will have a similar impact, it is crucial to note that the market is already aware of 11 out of the 12 months used for annual calculations. Therefore, any changes in headline inflation or core inflation may not come as a surprise. However, the focus will mainly be on the “core” month-over-month number, which is currently expected to be 0.3%.
If this number comes in at 0.2% or lower, it is likely that mortgage rates will improve. On the other hand, if it exceeds 0.4%, rates will likely see an increase. This report has the potential to disrupt the current calm trend in mortgage rates, and investors will be closely watching the results.
