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As is the case on any given Thursday, many media outlets are citing Freddie Mac’s weekly rate survey. This week’s installment suggests that the rates are higher than last week’s and we would definitely agree to that. But when it comes to today, the rates are especially low. In fact, the average lender is in line with Monday’s levels, making today’s rates the lowest in the week.
The mortgage market is only one part of the wide world of interest rates. The world is currently hanging in the balance as it waits to see if inflation will come down more aggressively from the highest levels in decades. It is currently easier to mark the drop as “leveling-off”.
Additionally, the market is waiting to see evidence of an impending recession. Either component will result in lower rates, but it is the decline in inflation that is most important.
Because there are only a handful of data points that have the market’s full attention on these topics and because those data points are about two weeks away, rates are generally in a holding pattern between now and then. Anyway this is the base case. There is always a risk that a large, unexpected development will lead to instability.
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