Which direction is the mortgage market going ahead of inflation metrics?

Woman checks her finances | mortgage rate news

The mortgage market is waiting for new inflation data

For the second day in a row, the mortgage market ended down slightly. The national average for a 30-year fixed rate mortgage ended Tuesday’s session down 0.03% at 7.09%*.

The last two days of trading have been similar with moves down earlier followed by slow chop back upwards until close. It’s clear that the market is waiting for fresh data before deciding which way to go. A cool inflation report has the potential to push the mortgage market lower, while a hot report could send rates back up.

What’s the expectation on inflation data?

Industry experts are expecting today’s Consumer Price Index to come in slightly cooler than it did last month. Analysts are forecasting that the year-over-year inflation rate will drop to 3.1% from 4% in May. However, the monthly rate may show an increase. The core CPI, the metric that strips out food and energy costs, is expected to show improvement in both its monthly and yearly rates.

The Fed’s Beige Book, an accounting of regional economies around the country, will also be released on Wednesday afternoon.

Can new legislation help cool off the housing market?

Lawmakers in Washington introduced a a new bill on Tuesday aimed at limiting investor activity in the housing market.

The Stop Predatory Investing Act was introduced by Sen. Sherrod Brown (D-OH) and Sen. Ron Wyden (D-OR), and others. If passed, the bill would limit investors who purchase 50 or more single-family home rentals from deducting interest on depreciation on those properties on their taxes.

The bill would also offer incentives to investors who sell single-family rentals back to homeowners or community nonprofit organizations. The bill also allows owners to continue receiving tax deductions on homes financed using low-income tax credits.

Brown was quoted as saying, “In too many communities in Ohio, big investors funded by Wall Street buy up homes that could have gone to first-time homebuyers, then jack up rent, neglect repairs, and threaten families with eviction.”

* National average rates accurate as of 7/11/23 from MortgageNewsDaily.com and are not advertised rates from Guaranteed Rate.

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