Big news week but small change for mortgage rates

Happy Friday from Local Mortgage!

It was a busy 4 day week with several key economic reports released Friday, but rates have not moved significantly this week. We are off the absolute lows from last Friday, up just a bit to 5.75% for our best 30-year fixed conventional scenario.

Markets traded sideways in a pretty narrow range ahead of Friday’s economic reports. We say a little push back off the lows on Tuesday and Wednesday, with most of that being erased Thursday. Friday brought us the 4^th quarter GDP report and December’ s PCE price index.

GDP fell sharply from the 3^rd to 4^th quarter, down from 4.4% to 1.4%, with consumer spending and exports significantly weaker. This weaker than expected economic news was offset by a rise in the PCE index, which is the FED’s preferred inflation indication. The December PCE Index was up from 2.8% to 3.0%, its highest reading since April 2024. As we have seen over the past 2 years, it will be difficult for rates to move dramatically lower until our inflation numbers improve.

One other headline from Friday was the Supreme Court’s decision to strike down tariffs that were imposed last year. It will take some time to see the results of this decision, but the immediate reaction was unfavorable for mortgage rates.

Next week will be a lighter week for economic reports. We will get Consumer Confidence on Tuesday and more inflation data with the Producers Price Index on Friday.

Hope everyone has a great weekend and thank you for reading.