Rates continue to improve on hopes of a peace deal

Happy Friday from Local Mortgage!

A much better week for mortgage markets as rates. Reports of progress to end the conflict in the Middle East continued to be the primary influence for mortgage markets, while the economic data caused little reaction. We will end the week back to 6.25% for our very best 30-year fixed Conventional scenario.

Mortgage rates officially reached a 2-week low mark on Thursday after news of a potential peace deal with Iran. It has been no secret that markets are in favor of peace due to the immense impact that higher oil prices have on the global economy.

The biggest economic news of the week came Thursday with the PCE price index, which is the FEDs favored inflation indicator. Core PCE in April was 3.3% higher than a year ago, up from an annual rate of increase of 3.2% in March and the highest level since November 2023. Progress toward the 2.0% target of the Fed has not been easy, and this desired level has not been achieved since February 2021.

Looking ahead, attention will remain fixed on the conflict in the Middle East. Investors also will monitor comments from Fed officials about future monetary policy.  For economic data, The ISM national manufacturing sector index will be released on Monday and the services sector index on Wednesday. JOLTS will come out on Tuesday. The key Employment report will be released on Friday, and these figures on the number of jobs, the unemployment rate, and wage inflation are always closely watched.

Hope everyone has a great weekend. Thank you for reading.