Fixed mortgage rates decreased for the second consecutive week. The 30-year fixed-rate mortgage averaged 6.66%, while the 15-year fixed-rate mortgage averaged 5.72%. July's Consumer Price Index rose 2.7%, slightly below expectations, raising hopes for a rate cut. Analysts believe a rate reduction by the Federal Reserve is likely. While lower rates can contribute to inflation, slower inflation growth allows the Fed more room to cut rates. Lenders adjust offers based on anticipated Fed actions, suggesting mortgage rates might ease before the Fed's September meeting.
The 30-year fixed-rate mortgage averaged 6.66% in the week ending Aug. 14, down four basis points from the previous week. The average 15-year fixed-rate mortgage fell seven basis points to 5.72%.
July's Consumer Price Index (CPI) rose 2.7% on an annual basis, slightly below the forecast among economists of 2.8%. While growing inflation should theoretically make the Federal Reserve less likely to cut rates in September, market analysts are buoyed by inflation accelerating slower than previously feared.
Despite pressures to cut rates immediately, the Fed has resisted because lower interest rates can contribute to inflation. If inflation isn't growing as fast as previously thought, then this risk is offset somewhat, giving central bankers more license to lower rates.
Mortgage shoppers should bear in mind that lenders anticipate what the Fed will do ahead of time and bake these expectations into rate offers.
Collection
[
|
...
]