Mortgage rates react to inflation data

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Inflation data hits expectations


The Consumer Price Index report for April 2024 showed that inflation increased 0.3% from March. On a 12-month basis, the CPI increased 3.4%. This matched the market prediction. Core inflation was at 3.6%. This is the lowest reading for inflation data minus food and energy since April 2021.

Dan North, senior economist at Allianz Tread North America, stated, “This is the first print in a month that wasn’t hotter than expected, so there’s a relief rally. The excitement is a little overdone. This is not Caitlin Clark. She’s exciting, this is not exciting.”

Shelter and energy costs increased 0.4% month-over-month, but were up 5.5% year-over-year. These two areas of the CPI continue to prove to be stickier than others. If the Fed is going to show progress in its fight against inflation, these two areas will need to show improvement.


How did mortgage rates react to CPI data?


The national average rate for a 30-year, fixed-rate mortgage dipped 0.12% to 6.99%* after the release of inflation data.

Given that inflation data is closely watched by the Federal Reserve, a positive response to a report that comes in cool should be expected. CPI data sparked a bond market rally, and that helped mortgage rates come in lower. The report also sparked thoughts among market watchers that the Federal Reserve will look to cut interest rates sooner than previously thought.

Next week looks light on data, but we may get additional direction from the FOMC meeting minutes release on Wednesday, May 22nd.


What’s the latest prediction for the Florida & Texas markets?


In a recent interview with Fox Business, Redfin CEO Glenn Kelman predicted that the housing markets in Florida and Texas will get more affordable.

Kelman said, “Both Florida and Texas were two of the first states to see price declines, and I wouldn’t even say that’s unhealthy. Normally, in a correction, prices come down. And that’s what drives sales up.”

He went on to say, “The fact that we’re able to build more houses in states like Florida and Texas, where there’s a better regulatory environment for new construction, that’s a good sign. It means that homes are going to get more affordable and that people are going to keep moving there.” 

We’ve seen in recent data that certain markets in Florida and Texas have started to soften. If you’ve considered either state for your new home, now might be the time to get back into two of the more popular areas in the country.


* National average rates accurate as of 5/15/24 from and are not advertised rates from Guaranteed Rate.

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