John’s Finance Corner: Positive Shifts in Mortgage Rates Amidst Economic Data
In my role as a Senior Loan Officer, keeping a vigilant eye on economic trends is part of my daily routine. The previous week stood out as a significant one, with a succession of pivotal data releases indicating a positive shift in mortgage rates. This development bodes well for the real estate sector and offers promising prospects for homebuyers.
Inflation Takes a Dip: The Consumer Price Index (CPI) for June showed a decrease of 1% from May, marking the first monthly decline since the pandemic’s onset. This drop brought the annual inflation rate down from 3.3% to 3%. The Core CPI, which excludes the more volatile food and energy prices, saw a modest monthly increase of 0.1%, while the annual rate slightly decreased from 3.4% to 3.3%. These figures were all below estimates, with falling gas and shelter costs contributing to the favorable numbers.
PPI Heats Up: On the other hand, the Producer Price Index (PPI) for June came in hotter than anticipated, with a monthly increase of 0.2% and an annual jump from 2.4% to 2.6%. The Core PPI, which also removes food and energy prices, rose by 0.4%, and the year-over-year figure climbed from 2.6% to 3%. Although the PPI report didn’t stir the markets upon release, it’s a critical indicator as its components feed into the Personal Consumption Expenditures (PCE) report, due on July 26th.
Fed Chair Powell’s Testimony: Last week, Fed Chair Jerome Powell addressed both the House and Senate, noting a slowdown in economic growth following a robust expansion in the latter half of last year. With consumer inflation cooling and the economy showing signs of deceleration, there’s increasing pressure on the Fed to start reducing the benchmark Federal Funds rate. The odds are growing for a rate cut at the Fed’s meeting on September 17th-18th, with upcoming inflation and labor market reports being key to their decision-making process.
Upcoming Housing and Economic Reports: This week, we’re anticipating updates on housing, starting with home builder sentiment on Tuesday. We’ll also receive data on June’s Housing Starts and Building Permits on Wednesday. Retail Sales for June will be released on Tuesday, and the latest Jobless Claims figures are set for Thursday. Updates on manufacturing in the New York and Philadelphia regions will also be closely watched.
As we prepare for another eventful week, these economic indicators will be instrumental in shaping the mortgage rates landscape. It’s an exciting time for those of us in the financial sector, as we help guide our clients through these changing tides with expertise and foresight.
Stay tuned for more updates!
John Lamberg
Senior Loan Officer
Mobile 727.366.9947
Website ccm.com/john-lamberg
Email [email protected]
