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If we can blame only one thing for the huge jump in interest rates seen since the beginning of 2022, it would be inflation. This fact led to a high degree of focus on reports such as today’s Consumer Price Index (CPI), which is clearly the most relevant monthly data point on inflation as far as interest rates are concerned.
Today’s CPI data was in line with expectations at face value, but the underlying details were favorable to the rate. Notably, the component measuring housing expenditure saw its biggest decline since the start of the pandemic. This is important because it remains one of the last and most stubborn points in a price scenario where many other components have long since returned to more normal levels.
All this to say that the bond market (which underlies interest rate changes from day to day) responded favorably to the inflation data. The average mortgage lender was thus able to quote slightly lower rates than yesterday. The caveat is that more than a few lenders were forced to adjust pricing several times during the day in response to market volatility. Those changes weren’t enough to make today’s rates higher than yesterday’s, but they produced a more moderate improvement on the day overall.
30-year fixed rates remain in the mid-6% range for most lenders, but this assumes a top-level scenario with limited loan-level pricing adjustments (upfront costs imposed by regulators for certain loan/borrower/property characteristics) Is.
Last but not least, it’s worth reiterating that there is no new 40yr FHA loan program, contrary to what has been discussed a lot over the past week (here’s why).
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