Market Update:

Today, the CPI report was released, and the 10-year treasury bond did not react well. Mortgage rates coincide or move in the same direction as the 10-year moves. Since the release of the CPI data this morning, the 10-year has increased by 11.5 basis points (bps). To put that in terms of rates, 1 bps = 1/100 of a percent. So, that 11.5 bps = about .125% in rate.

Below is a quick explanation of the CPI data and how much it increased in January.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

CPI for all items rose 0.3% in January; shelter up
02/13/2024
In January, the Consumer Price Index for All Urban Consumers increased 0.3 percent and rose 3.1 percent over the last 12 months. (Remember, the Fed wants this number to be at 2.0%)

Had the CPI come in lower than anticipated, even a smidge lower, rates would have remained steady or ticked downward. The anticipated Fed rate cut in March is all but off the table and there is only a 50% chance of a rate cut in May. Personally, I do not think we will see a rate cut until summer and some predict no rate cuts this year. The Fed has said all along to brace for rates to stay high for a longer period of time. With inflation still coming in higher than anticipated, the Fed is staying true to its comments.

Overall, we are better than where we were in December and I believe in the summer, we will be better than where we are now and so on.

People are still buying homes. I see it personally….. Since moving to the broker channel, I had the best January I’ve had in 22 years. Closed $2.8 million.

Keep grinding