Home Mortgage Alliance Corporation (HMAC)

January Consumer Price Index higher than markets expected

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Published Date 2/13/2024

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Higher

Mortgage rates are moving higher today. The MBS market worsened by -7 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Higher

Inflation: The January Headline CPI data with the new weighted calculations (seasonal adjustments released last week) showed a MOM increase 0.3% of versus estimates of 0.2% and a YOY gain of 3.1% versus estimates of 2.9%. Core CPI (ex food and energy) a pace of 0.4% versus 0.3% on a MOM basis and 3.9% versus 3.7% on a YOY basis.

Optimism: The NFIB Small Business Optimism Index dropped in January from 91.9 down to 89.9 and was well below estimates of 92.4.

Today's Potential Rate Volatility: High

This morning markets are moving higher on the inflation data. Volatility has started high as markets digest the data.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

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