What’s Ahead For Mortgage Rates This Week -March 17th, 2020
Last week’s scheduled economic reports included readings on inflation and consumer sentiment. Weekly readings on mortgage rates and new jobless claims were also released.
Inflation Holds Steady in February
The Consumer Price Index rose 0.10 percent in February and matched January’s reading. Analysts expected no inflationary growth for February and noted that the Coronavirus had not yet impacted national inflation.
Higher rents and grocery prices caused inflation to rise in February. Year-over-year, the Consumer Price Index rose 2.30 percent in February after posting its highest reading of 2.50 percent in January; analysts expect inflation to decrease in the coming months.
The Core Consumer Price Index, which excludes volatile food and energy sectors, grew by 0.20 percent and matched expectations and January’s growth rate.
Mortgage Rates Mixed as New Jobless Claims Fall
Freddie Mac reported that the average rate for 30-year fixed-rate mortgages rose seven basis points to 3.36 percent last week after posting the lowest rate on record the prior week. The average rate for 15-year fixed-rate mortgages fell two basis points to 2.77 percent.
The average rate for 5/1 adjustable rate mortgages dropped by 17 basis points to 3.01 percent. Discount points averaged 0.70 percent for fixed-rate mortgages and 0.20 percent for 5/1 adjustable rate mortgages.
New jobless claims fell to 211,000 claims filed from the prior week’s reading of 215,000 first-time claims filed. Consumer sentiment dropped to an index reading of 95.90 in March as compared to February’s reading of 101.00; analysts expected consumer sentiment to fall to an index reading of 95.00.
The March reading was the weakest in five months and was attributed to fears of the Coronavirus. The current consumer sentiment index covered data through March 11 and index readings are expected to fall lower as impacts of the Coronavirus unfold.
This week’s scheduled economic news includes readings from the National Association of Home Builders on housing market conditions, sales of pre-owned homes reported by the National Association of Realtors® and Commerce Department readings on housing starts and building permits issued.
The Federal Reserve will issue its post-meeting statement of its Federal Open Market Committee and Fed Chair Jerome Powell will give a press conference after the FOMC statement. Additional economic news and policy announcements related to the Coronavirus may also be released.