Instant Reaction: Mortgage Rates, July 11, 2024

Facts: The 30-year fixed mortgage rate from Freddie Mac declined to 6.89% over the last week from 6.95%. At 6.89%, with 20% down, a monthly mortgage payment on a home of $400,000 is $2,105; with 10% down, it is $2,369.

Positive: The CPI retreated today. Importantly, shelter, which is a lagging component but more than one-third of CPI, had slower gains. Fed Chair Jerome Powell indicated to Congress yesterday that there is a path to lowering the Fed Funds rate if inflation continues to cool. Today’s reading showed a measure of cooling.

Negative: Yesterday, Powell indicated “we probably won’t go back” to the ultralow rates seen in the last 10-15 years. For those thinking of mortgage interest rates—the implication has a ripple effect—buyers waiting for mortgage rates to again be at once-in-a-lifetime lows are likely going to be waiting a very long time.