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Where inflation has grown the most over the last 12 months:

The housing and mortgage industries are very sensitive to inflation. Recent and steady upward pressure in inflation has caused mortgage rates to move higher.

Visual Capitalist's Marcu Lu visualized last week CPI's report categories that became significantly more expensive from March 2023 to March 2024.

Interestingly, prices of “video discs and other media” rose by a substantial 30.1% year-over-year as of March 2024, highlighting rising demand for physical media such as vinyl records. According to an article from The Guardian, U.S. vinyl sales rose 21.7% in the first half of 2023, driven by artists like Taylor Swift, Lana Del Rey, and Fleetwood Mac. Swift’s latest album, Midnights, sold nearly 500,000 vinyl copies throughout the entire year.

Another category that rose significantly was “juice and drinks”, at 27.5%. This rise in cost has been attributed to numerous factors including sugar shortages, increased transportation costs, and diseases affecting orange trees in Florida.

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Higher

Mortgage rates are moving higher today. The MBS market worsened by -80 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Higher

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) The Fed, 2) Retail Sales and 3) Geopolitical

1) The Fed: This is the last week of open communication from the Fed before next week's media blackout period that leads up to their next FOMC meeting.

2) Retail Sales: This is the most important data set of the week. The stronger this data is, the worse it will be for rates and vice versa.

3) Geopolitical: The IMF starts a full week of meetings and the markets will be very sensitive to Iran/Israel, etc.

This Week's Potential Volatility: High

This morning markets are moving higher on the retail sales data. Volatility has started high and will remain high this week as markets adjust to new trading levels.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

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All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

Rates listed herein are for market direction and trends within the industry only. No APR is given and you are not guaranteed any listed rate or any lock period of said rates. Rates are only approved when your application is submitted and locked in by the lender along with all disclosures including APR.