Mortgage News Weekly

Mortgage News Weekly

GTG Financial, Inc
GTG Financial, Inc
Published on December 19, 2022

Mortgage News Weekly

Welcome to GTG Weekly!

Verify my mortgage eligibility (Feb 3rd, 2023)

We are excited to share with you the latest updates and insights from the mortgage market.

  • Mortgage Rates: We saw a nice dip early last week with the CPI (Consumer Price Index) for November being released. The market quickly gave up those gains after the anticipated Fed announcement on 12/14 and even back tracked for some products. You’ll see the technical breakdown below, overall there was a nice window to hit some low rates early in the week, but it closed quickly.
  •  Fed’s latest rate hike:
    • The Federal Reserve (Fed) increased its benchmark Fed Funds Rate by 50 basis points
    • This was the seventh rate hike of the year, though at a slower pace than previous hikes
    • The Prime rate is now 7.50%
    • The Fed Funds Rate is the interest rate for overnight borrowing for banks, and is not the same as mortgage rates
    • The Fed hikes the Fed Funds Rate to slow the economy and curb inflation
    • Most members of the Fed forecasted a Fed Funds Rate of over 5%
    • The projected terminal rate (highest the Fed Funds Rate will go in the cycle) increased to 5.1% from 4.6%
    • Fed Chair Jerome Powell acknowledged that recent inflation data shows a “welcome reduction in the monthly pace of price increases”
  •  Consumer inflation:
    • The Consumer Price Index (CPI) showed a 0.1% increase in November, lower than expected
    • On an annual basis, inflation decreased from 7.7% to 7.1%, lower than the 7.3% expected
    • Core CPI, which excludes volatile food and energy prices, also came in lower than expected with a 0.2% increase
  •  Small business owners:
    • Continue to report that inflation is their top problem
  •  Jobless claims:
    • Continuing jobless claims remain at their highest level since February

November Inflation Stats:

Finally headed in the right direction?

The major focus that helped rates this past week was that overall and core inflation metrics came in UNDER expected amounts.

  •  Overall inflation increased by 0.1% but was 0.2% below expectations.  Year over year, inflation declined from 7.7% to 7.1%, which was lower than expected.
  •  The Core rate increased by 0.2%, which was softer than anticipated.  As a result, year over year core inflation decreased from 6.3% to 6.0%, also lower than expected.
  •  Shelter costs, which make up 39% of Core CPI, rose 0.6% in November
  •  Rent prices have been moderating, with a 4.7% increase from January to November 2021, compared to an 18% increase the previous year
  •  Energy prices fell 1.6% from a month ago, bringing the annual gain to 13.1%.
  •  Food prices climbed 0.5% in November, bringing the year-over-year gain to 10.6%.
  •  Medical care costs fell 0.5% last month and are up 4.2% year over year.

Follow along on all social channels, to keep up with all things mortgage related!

Show me today's rates (Feb 3rd, 2023)
GTG Financial, Inc
GTG Financial, Inc
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