Mortgage bond prices finished the week higher which kept interest rates in check. Interest rates fell the first portion of the week amid tame consumer inflation data. Consumer prices rose 0.2% as expected. The Core, which excludes volatile food and energy prices, rose 0.2% as expected. Retail sales fell 0.1%. Analysts expected an increase of 0.3%. Producer prices rose 0.2% versus the expected 0.1% increase. Weekly jobless claims were 226K as expected. Housing starts were 1236k versus the expected 1290K. There was some upward pressure on interest rates early Friday morning amid some solid data. Industrial production rose 1.1% versus the expected 0.3% increase. Capacity use was 78.1% versus the expected 77.5%. Consumer sentiment was 102 versus the expected 99.5. We ended the week better by approximately 1/8 of a discount point. Call today to prequalify for a home loan!
Will They or Won’t They?
The Fed has primed everyone the past few weeks for an interest rate hike at their March 21st meeting. There was a 50% chance of a March increase at the beginning of the year. That figure increased to 75% by February and above 85% by the beginning of March. Most analysts point to the solid employment report as the impetus for the Fed move. Signs of continued employment strength will likely result in action from the Fed in the meetings ahead.
The Fed’s schedule the remainder of the year includes meetings May 2, June 13, August 18, September 26, November 8, and December 19. Right now the odds of another Fed rate hike in June are in excess of 75%. The odds of whether or not the rate increases continue into September currently hover around 50%. Call today to prequalify for a home loan!
Now is a great time to take advantage of still historically favorable rates to avoid future volatility.
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