INFLATION/ FED SPEAK/ GEO POLITICS
Higher inflation has been the main topic for several months and mortage interest rate market has been volatile.
Last week the markets were stunned by the high 6% CPI year-over-year increase and fun her stunned when Fed President from St Louis (Bullard) declared he wanted to see a 1% increase in the Fed Funds rate by July I, 2022. With only 3 meetings scheduled between now and July I, using Bullard’s math one of the meetings (March, May, or June) would need to see a .50 basis point increase and the financial markets have been more in line with pricing for a .25 increase. As a result, mortgage rates climbed to the highest levels in over two years.
So as we move into a new business week there are 2 items that we will are keeping our eye on;
Even though the CPI report is in the rear-view mirror and we rum our anent ion to tomorrow’s Producer Price Index. The Producer Price Index is a measure of wholesale inflation and much of this gets passed on to the consumer.
Russia/Ukraine border situation- there has been a lot of news regarding a Russian invasion, but it has not materialized yet. Headline news/geopolitical news in recent months has not had an impact on the bond market but in this instance, the Russia/Ukraine border issue is moving markets.
Looking at the week ahead, investors will focus on tomorrow’s Producer Price Index which measures wholesale inflation. The Federal Reserve notes are due out this Wednesday and are likely to get attention as they may speak to the view of future Fed activity. Retail Sales and Existing Home Sales information are also coming out this week.
Sources: Bloomberg, CNBC, XIN IX, Inc., Business Insider, Mortgage Bankers Association, Mortgage Daily News, Investing.com
2022 Single Family Mortgage Loan Limit
- Conventional Loan Limit $647,200
- FHA – Collier County – $552,000 or FHA – Lee County is $420,680
- (Duplex, Triplex and Quad Loan Limits are Higher)
FREDDIE MAC’s WEEKLY PRIMARY MORTGAGE MARKET SURVEY® From January 27, 2022
- 30 Year Fixed= 3.69% + .8 discount point/ IS Year Fixed= 2.93% + .8 discount point
- The 30 Year fixed mortgage rate is approx. 1 year ago – February 4th, 2021 was 2.73 +.7 discount. A discount point of .7 means an additional charge to the buyer of $2870.00 based on the average mortgage loan of $410,000 (MBA). A discount point of .7 means an additional charge to the buyer of$2870.00 based on the average mortgage loan of$410,000 (MBA)
LEADING INDICATORS TODAY
- 10 Year Treasury-Opened Today 1.9630 the 52 week low is 1.1280 and the 52 week high is 2.0630
- WTI Crude Oil (CLl}-Opened Today $93.93 the 52 week low is $57.25 and the 52 weeks high is $95.82