It sure seemed like there was plenty of extra buffer built into the recent mortgage rates. With the CPI report coming out more favorable than expected, the markets reacted – and boom, a half-point drop!
If buyers get the feeling that both rates and prices are coming their way, it should keep them looking. If there were just a few more quality homes to sell!
This morning’s trading action offers resounding validation of the market’s hyperfocus on this particular CPI report.
In a month where the average price of diesel and gas were markedly higher than the previous month, even HEADLINE CPI (which includes fuel prices) was down more than 0.2% month over month.
But the star of the show was the drop in core CPI from 0.6 to 0.3 month over month, much lower than the 0.5 f’cast. This makes the chart look more “toppy” whereas 0.6 or higher would have kept the “sideways to slightly higher” trend intact.
Bonds are in the midst of their best rally since March, 2009!
https://www.mortgagenewsdaily.com/markets/mbs-morning-11102022
The magic of Economists ability to say nonsense while at the same time taking neither side.
The Dawg predicts: “Mortgage rate rises PAUSE”.
The only way this is a drop is if the Fed sent out a secret memo to allow central banks to increase lending ratios. Wat too early for that hail mary.
It was 7.3% last week. I’ll take it.
Goldman Sachs reports that its intra-day estimate of U.S. financial conditions from its financial-conditions index eased by over 50 basis points today following the rally triggered by the October CPI print. That is the third-largest single day decline on record.