Mortgage rates

Even though the 30-year fixed rate mortgage is at its lowest level since mid-March, consumers are being cautious in returning to the market, Freddie Mac said.

Nearly all of the economists surveyed by Wolters Kluwer in July expect the FOMC to reduce short-term rates, but less of them expect it to happen at the September meeting than the number who believed so last month.

The resilience of the equity market has been underpinned by optimism the economy has withstood the worst of Fed tightening.

Positive signs on jobs and inflation help drive the 10-year Treasury yield lower, and lead investors to forecast a short-term rate cut sooner than later, Freddie Mac said.

For the sixth consecutive month, more mortgage credit is available to consumers, but it still remains historically tight, the Mortgage Bankers Association said.

The increase, coming off of persistent low levels, did not counter the slow purchase market during the month, Optimal Blue found.

June housing market data from Redfin found home prices hit a new all-time high. Fortunately, monthly mortgage payments decreased and new listings were up 10%.

Ongoing challenges from limited inventory levels and elevated prices likely spells little lending momentum this summer, Mortgage Capital Trading said in its latest report.

The overall Bureau of Labor Statistics number was a tad higher than expected but other indicators point to economic weakness that could lower mortgage rates.

News on the jobs front on Wednesday eliminated two-thirds of the six-day gain in Treasury yields.

Year-over-year home price growth was at its slowest pace since October, Corelogic's Home Price Index report said.

Buyers can expect a quiet market moving into July. Despite an uptick in new listings, a report on data from June said contract volume is still behind historical norms.

Home sales with mortgages rose from a year ago by a larger percentage, 15.1%, than those conducted in cash, which increased 10.6%.

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The core personal consumption expenditures price index, which strips out food and energy, increased 0.1% from the prior month, the smallest in six months.

But economists seem to differ on what the latest movement in mortgage rates means for the summer home sales business.

Cook expects three- and six-month inflation rates to continue to move lower on a "bumpy path," with monthly data similar to the "favorable" readings seen in the second half of 2023 for the rest of the year.

Potentially limiting the Federal Reserve's ability to cut rates is the growing view that the economy's so-called neutral rate — a theoretical level of borrowing costs that neither stimulates nor slows growth — is much higher than policymakers are currently projecting. 

The increase in total home sales will be slower than prior projections and that should lead to less growth in purchase originations, Fannie Mae's June forecast said.

The decline for the third consecutive week reflects investors' belief that the Federal Open Market Committee is likely to cut rates this year.