Rates fell Thursday, but have moved up again since. Currently, they are lower than they were last week, but only by a few basis points. The 30-year fixed rate mortgage is 1 basis point lower at 3.19% while the 30-year fixed rate mortgage is 3 basis points lower at 2.57%.
Instead of dropping 0.3% as expected, retail sales showed a 0.7% increase in September. After this surprising report, 10-year Treasury yields briefly shot up to 1.57% on Friday and continued this momentum through Monday. Also on the rise are consumer prices which, excluding food and energy, grew 4.0%. Based on this, and the recent drop in unemployment claims to below the 300K mark, the Federal Reserve is likely to move forward with their tapering after their meeting on November 2. How will this impact rates though? While mortgage rates are slightly lower for the moment, the Mortgage Bankers Association (MBA) forecasts the rate for 30-year fixed loans will move up to 4% by 2022. This may dampen refinance demand, but originations for purchases are predicted to grow 9% to a whopping $1.73 trillion by next year.