Mortgage
rates
continued
to
inch
toward
the
7%
mark
following
last
week’s
meeting
of


Federal
Reserve
policymakers
and

new
inflation
data
that
showed
further
cooling
of
consumer
prices.

On
Tuesday,


HousingWire‘s
Mortgage
Rates
Center
showed
that
the
average
30-year
rate
for
conforming
loans
was
7.08%.
That
was
down
11
basis
points
from
the
same
time
last
week
and
exactly
50
basis
points
below
this
year’s
peak
rate
that
was
recorded
in
early
May.

HousingWire
Lead
Analyst
Logan
Mohtashami

recently
noted
that
some
specific
economic
signals
are
working
in
the
favor
of
lower
mortgage
rates.
These
include
a
decline
in
the
10-year
Treasury
yield
(which
fell
from
4.61%
on
May
29
to
4.24%
on
June
13)
and
a
narrowing
of
the
spread
between
the
30-year
mortgage
rate
and
the
10-year
yield.

“If
we
took
the
worst
levels
of
the
spreads
from
2023
and
incorporated
those
today,
mortgage
rates
would
be 0.52% higher,”
Mohtashami
wrote
on
Saturday.
“While
we
are
far
from
being
average
with
the
spreads,
the
fact
that
we
have
seen
this
improvement
is
a
plus
this
year.”

Along
with
the
lower
costs
of
borrowing,
prospective
homebuyers
are
also
being
helped
by
more
homes
listed
for
sale.
Data
from


Altos
Research
shows
that
for-sale
inventory
at
the
national
level
grew
by
1.5%
during
the
week
ending
June
14
and
has
reached
its
2024
peak
of
more
than
620,000
homes.
For
context,
the
inventory
level
in
mid-June
2023
was
less
than
452,000.

“If
mortgage
rates
keep
falling
and
demand
picks
up,
we
will
have
a
much
better
buffer
with
active
inventory
than
in
2022
and
2023,”
Mohtashami
observed.
“My
rule
of
thumb
has
been
that
inventory
should
have
some
weekly
prints
between
11,000
–
17,000
as
long
as
rates
are
above
7.25%.
We
have
hit
that
three
times
this
year;
last
year
was
a
whopping
zero.”

Last
week,
as
expected,
the
Federal
Open
Market
Committee

left
benchmark
rates
unchanged
for
a
seventh
straight
meeting,
holding
them
steady
at
a
range
of
5.25%
to
5.5%.
That
came
a
day
after
the
Consumer
Price
Index
for
May
showed
that
annualized
inflation
fell
to
3.3%,
down
from
3.4%
growth
in
April.
Fed
officials
have
taken
a
hardline
stance
that
inflation
must
move
closer
to
their
2%
target
before
short-term
interest
rates
can
be
trimmed.

The

U.S.
employment
report
for
May
also
influenced
the
Fed’s
decision
to
leave
rates
unchanged.
The
national
economy
added
272,000
jobs
last
month,
beating
estimates
of
180,000
and
far
outpacing
the
revised
figure
of
160,000
jobs
added
in
April.

Melissa
Cohn,
a

Florida-based
regional
vice
president
for

William
Raveis
Mortgage,
said
in
prepared
remarks
last
week
that
the
Fed’s
“updated
dot
plot
was
more
hawkish
than
we
had
hoped.“
She
noted
that
in
March,
10
of
19
officials
indicated
a
total
of
three
rate
cuts
this
year.
Last
week,
11
of
19
predicted
one
cut
or
fewer.

“We
are
back
to
data-watching.
There
were
no
huge
surprises
in
the
Fed’s
comments
or
dot
plot,“
Cohn
said.
“Expecting
one
rate
cut
should
be
neutral
for
the
markets,
and
the
Fed’s
future
actions
will
depend
on
the
markets.
Let’s
hope
that
we
see
the
CPI
report
next
month
to
show
further
progress
on
inflation
—
then
we
will
have
a
good
summer
for
mortgage
rates
and
the
real
estate
market.”

A

Redfin

report
released
last
week
noted
that
even
as
the
U.S.
median
home
price
reached
another
record
high
of
$394,000
during
the
four
weeks
ending
June
9,
declining
mortgage
rates
are
helping
to
alleviate
monthly
mortgage
payment
burdens.
But
Redfin
also
cautioned
that
if
lower
rates
lead
demand
to
outpace
supply,
affordability
could
take
a
hit.

”Lower
rates
and
higher
prices
may
ultimately
cancel
each
other
out
when
it
comes
to
homebuyers’
monthly
payments,”
Chen
Zhao,
Redfin’s
economic
research
lead,
said
in
the
report.

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