Mortgage Rates Improve Again This Week

Happy Friday from Local Mortgage!

Mortgage markets remained sensitive to energy prices this week. The potential agreement to ease tensions in the Middle East helped push oil prices down to their lowest levels since late February, reducing inflation concerns. Meanwhile, the economic reports revealed no major surprises and had only a modest impact on financial markets. As a result, mortgage rates ended the week a little lower, we are now down to 6.125% for our best 30-year fixed Conventional scenario.

The biggest economic news this week was focused on inflation. The PCE price index, which is the FEDs favored inflation indicator, rose to 3.4% in May up from 3.3% in April. This increase was expected so reactions from the market were muted.

In May, sales of previously owned homes rose 7% from April, exceeding expectations, and were up 7% from a year ago. The median price of $429,300 was up just a slim 1% from last year at this time to a record for the month of May. By contrast, May new home sales, which account for roughly 10% of the market, did not fare as well. They fell 7% from April to the lowest level since January and were 7% lower than a year ago. Unlike existing home sales, which are based on closings, new home sales measure contracts signed during the month.

Looking ahead, attention will remain fixed on the conflict in the Middle East and the proposed deal to ease tensions. For economic data, JOLTS and Consumer Confidence will be released on Tuesday. The ISM national manufacturing sector index will come out on Wednesday. The key Employment report will be released on Thursday, and these figures on the number of jobs, the unemployment rate, and wage inflation are always closely watched. Mortgage markets will be closed on Friday for July Fourth.

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