Weekly Mortgage Report – February 17, 2023
Per Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed rate increased 20 basis points based on applications collected from Freddie dating 2/9/23 – 2/15/23. Mortgage rates moved up for the second consecutive week. The economy is showing signs of resilience, mainly due to consumer spending, and rates are increasing. Overall housing costs are also increasing and therefore impacting inflation, which continues to persist.
January CPI data from the Bureau of Labor Statistics was released Tuesday 2/14/23, showing core CPI increasing 0.4% monthly and 5.6% from a year ago, against respective Dow Jones estimates of 0.3% and 5.5%. Across-the-board increases in shelter, food and energy boosted the index after inflation had shown signs of receding in recent months. Headline CPI came in at 0.5% for the month, and 6.4% year-over-year. “Inflation is easing but the path to lower inflation will not likely be smooth. The Fed will not make decisions based on just one report but clearly the risks are rising that inflation will not cool fast enough for the Fed’s liking,” said Jeffrey Roach, chief economist at LPL Financial.
Retail sales went up 3% in January, despite inflation increases, according to the Commerce Department. The numbers are not adjusted for inflation, meaning that consumers outpaced the 0.5% inflation rate for the month, according to CNBC economists. Food services and drinking places shot up 7.2% to lead all major categories, with Motor vehicle and parts dealers right behind that with a 5.9% increase. No categories saw a decline. “The monthly reports on industrial production, retail sales, and jobs were generally better than expected and point to a pickup in economic activity in early 2023 after a soft patch in late 2022,” said Bill Adams, chief economist for Comerica Bank.
Approximately 9 out of 10 metro markets registered home price gains in the fourth quarter of 2022 according to the National Association of Realtors latest quarterly report. 18% of the 186 tracked metro areas registered double-digit price increases over the same time period, down from 46% in the third quarter of 2022. Compared to a year ago, the national median single-family existing-home price rose 4.0% to $378,700. “A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years,” NAR Chief Economist Lawrence Yun said, noting these costs increases have far surpassed wage increases and consumer price inflation.