Mortgage Insights Issue #1 6.12.2023

Mortgage Rates

Mortgage rates are a crucial factor to consider when exploring home financing options. Keeping track of these rates allows borrowers to make informed decisions and potentially secure more favorable terms. While the reported average rates may appear high, it's important to note that they tend to be skewed and may not reflect the rates available through specialized brokerages like Vanguard Lending, where I work. Nevertheless, monitoring the daily changes in rates provided by sources like Mortgage News Daily (MND) can offer valuable insights. For instance, if MND indicates a decrease of 0.10% in the rate for a 30-Year Conventional Mortgage, it is likely a reliable indicator applicable across various lenders.

According to Mortgage News Daily, the average rates are currently:

• 30 Year Conventional Mortgage 6.92%

• 30 Year FHA 6.6%

• 30 Year VA 6.62%

Economic Calendar

To grasp the larger economic landscape influencing mortgage rates, it's crucial to be aware of key events. Here are some significant upcoming dates and events:

Understanding these events:

1. Consumer Price Index (CPI): Published monthly by the Bureau of Labor Statistics. CPI measures inflation across various sectors of the economy. It's important to distinguish between "Headline CPI" (overall inflation) and "Core CPI" (which excludes volatile sectors like food and energy).

2. Federal Reserve Interest Rate Decision: This announcement reveals whether the Federal Reserve intends to raise, lower, or maintain the Federal Funds Rate, which directly impacts interest rates.

3. Federal Reserve Press Conference: Typically held at 2:30 PM following the interest rate decision, this press conference sheds light on the factors influencing the Fed's decision and provides guidance on future monetary policies.

4. Philadelphia Federal Reserve Business Index: Released monthly, this survey assesses business activity and offers insights into areas such as employment, orders, shipments, inventories, and pricing. It provides an understanding of operating costs and their potential impact on inflation.

5. Retail Sales Report: Published by the Census Bureau, this report indicates changes in the total value of sales at the retail level, offering insights into consumer spending patterns and its potential influence on inflation.

These economic events have the potential to influence mortgage rates in various ways. While their impact may vary, it's essential to pay attention to them, especially if you haven't locked in a rate yet. Allowing your rate to float before these events can be risky. Although it may pay off, it could potentially increase your Debt-to-Income ratio to a point where you no longer qualify for a loan. Ultimately, the decision to lock in a rate is yours, but I aim to provide you with as much information as possible to guide your decision-making process.

Please feel free to comment with any questions you have or suggestions for future editions. Your feedback is highly appreciated, and I look forward to your input!