Inflation came in hotter than expected this month, but we are still talking about rate cuts in 2024! When the market believes the Federal Reserve is done hiking rates, the markets make a big move lower with the 10-year yield and mortgage rates.
The Fed mainly focuses on core inflation, and its primary inflation data is the PCE inflation report. However, we have made some good progress with the core inflation data in the CPI report in the past year.
Generally speaking, today’s headline and core inflation prints were hotter than anticipated. Rents are still lagging badly behind the current data, and even though the downtrend in shelter inflation is here, we are far from the reality. Used car prices were more firm than anticipated but also in the downtrend. As shown below, we have room to go lower in shelter.
Source: Housing Wire
Mortgage Rates
Inch Up But Remain
in the
Mid 6% Range
The 30-year fixed-rate has remained within a very narrow range over the last month, settling in at 6.69% this week. Given this stabilization in rates, potential homebuyers with affordability concerns have jumped off the fence back into the market. Despite persistent inventory challenges, we anticipate a busier spring homebuying season than 2023, with home prices continuing to increase at a steady pace.
