Rates took a spill this week with both the 30- and 15-year fixed rate mortgages falling 4 basis points to 2.93% and 2.37% respectively.
Rates are currently in a volatile spot that could either mean sustained low levels or a quick and sudden uptick. 10-year Treasury yields are hovering around the 1.20% mark, which has proven to be a significant number for mortgage rates. In 2020 at the start of the pandemic, it triggered rates to plummet, and in 2021 it triggered them to increase. Looking ahead, the Federal Reserve will meet later this month, but will now have more data to contend with. The Consumer Price Index (CPI) came out yesterday and revealed a slowing rate of inflation. The metric increased by 4.0% in August instead of the predicted 4.2%. What does this mean? Experts had pushed the timeline for tapering back to November or December after the recent lackluster labor report. However, given that inflation is now less of a concern, the Federal Reserve may have even less cause to end easy monetary policy. However, we’ll have to monitor other factors including the number of delta cases, which the Fed is also keeping its eye on, to properly assess the situation.