How did the latest inflation data look?
The U.S. Bureau of Labor Statistics released Consumer Price Index for June 2024, and it showed that the economy made a fair bit of progress on inflation last month.
The month-over-month CPI was 0.1% lower in June 2024 than May 2024, and the annual rate was at 3%. This is the lowest level inflation has been at in over three years.
The core CPI, which excludes volatile food and energy costs, increased 0.1% monthly and 3.3% annually. This was the smallest annual increase for the core inflation rate since April 2021.
A 3.8% dip in gasoline prices helped the numbers come in a bit lower than expected. However, both food and shelter increased by 0.2%.
Chris Larsen, the managing director of trading and investing at E-Trade from Morgan Stanley, stated that the June inflation report means the Fed is “one step closer to a September rate cut.” Larsen went on to say, “A lot can happen between now and September 18, but unless most of the numbers pivot back into ‘hot’ territory, the Fed’s reasoning for not cutting rates may no longer be justified.”
Where are mortgage rates after CPI data?
The national average rate for a 30-year, fixed-rate mortgage fell 0.14% to 6.85%* on Thursday. The positive inflation data gave the market hope that the Federal Reserve may choose to start cutting interest rates sooner rather than later. The optimism spurred a rally in the bond market which helped mortgage rates slide lower.
Market watchers are optimistic that we may get one rate cut before the Fall and a second in the early Winter.
What’s the hottest market for real estate investors?
According to recent data, investors made up 14.8% of home purchases in the first quarter of 2024. Where were they buying? There was one state in particular that saw an impressive increase in purchase by real estate investors.
Several states in the Midwest saw an increase, but Missouri saw the highest share of home purchases by real estate investors during the first quarter of 2024. Investors in Springfield, MO accounted for 20.5% of the total homes bought in Springfield, MO in the first three months of 2024. They also bought 20.1% of the homes sold in Kansas City, and 18.9% of purchases in St. Louis.
However, only 64% of investors used cash in Q1 2024. That’s the lowest level since 2008. Hannah Jones, the chief economist at Realtor.com, said, “All investors expanded their use of debt financing, and the mix of investor buyers shifted to small and medium investors, who are somewhat more likely to use debt over cash.”
* National average rates accurate as of 7/11/24 from and are not advertised rates from Guaranteed Rate.
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