The Current Situation With Mortgage Rates

Your 5 minute weekly recap covering what's going on in the Real Estate industry

Author

Patrick Donoghue
March 02, 2023

In Today's Email

  • Inflation

  • 10 Year Treasury Yield

  • Mortgage Rates

  • Mortgage Applications

  • Quick reads

  • Executive summary

Inflation

February brought inflation data that shows higher than expected readings.

  • The core personal consumption expenditure price index (CPI) increased 0.6% for the month, up 4.7% up from a year ago.

  • Headline Inflation increased .6% and 5.4% respectively. All of these numbers were higher than estimates, which caused bond market reactions.

  • These numbers cumulatively may suggest inflation accelerated to start the new year, which could bolster the Fed’s resolve to continue interest rate hikes.

  • Non Farm Payrolls have increased in both January and February, while good news for employment, this will likely not bring the Fed pivot any sooner.

10-year Treasury Yield

Below is a snapshot of the 10 year treasury yield rising in the month of February. The 10 year treasury yield is an important element in setting the 30 year mortgage rate. As the bond market absorbed the inflation releases, strong employment numbers and the Fed's comments, the yield rose throughout the month.

Rates

The 30 year Mortgage rate has responded in kind showing a clear and significant increase over the last month.

Mortgage Applications

And rising rates have quelled demand, mortgage applications have decreased two weeks in a row as potential buyers retreat to the sidelines.

Quick Reads Around The Block

Executive Summary, From PD

The tension between 30 year mortgage rates and buyer demand is clear. We may see this demand rise and fall throughout 2023 as new data is released. Groundfloor remains consistent in the viewpoint that the overall direction is positive even though we may see month to month volatility that have short term effects on the market.

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