Rates fall on inflation report Nov 2022

Today May Have Been The Best Day To Make An Offer

Rates Lower On Inflation News

If you made an offer on a home in Washington DC today, you might have been in a better bargaining position than you would be tomorrow. Why? Because this afternoon’s Inflation report will dump some cold water on rates, improving the outlook for sellers–and buyers whose primary concern is rates. Stronger seller confidence, though, could energize the market and harden home prices. We’ll see. Here’s what happened:

The consumer price index, a key inflation barometer, jumped by 7.7% in October relative to a year earlier — the smallest 12-month increase since January. Economists expected a 7.9% annual increase, according to Dow Jones.

The annual rate is down from June’s 9.1% pandemic-era peak and September’s 8.2% reading, but is hovering near the highest levels since the early 1980s, per CNBC.

Ok, still high, but now we’re moving in the right direction. While a decline in the annual inflation rate doesn’t mean prices will fall for goods and services, the mortgage market did respond positively.

Peter Warden, The Mortgage Reports editor said:

“Average mortgage rates barely moved yesterday, just inching higher. Indeed, all week, markets have been drifting as they waited for this morning’s all-important inflation report: October’s consumer price index.

And that report’s brought good news. Because this morning it was looking likely that mortgage rates today will tumble. Of course, with markets, you can never say never. But the momentum is so strong I’d be astonished if those rates aren’t significantly lower this evening.”

Mortgage Rate Quote

Just Ask Jennifer Grillo

And in our Inbox this afternoon was an alert from Jennifer Grillo, a Senior Loan Officer at George Mason Mortgage. She wrote:

“Inflation numbers came in lower than expected. CPI, which measures inflation on the consumer level, was reported at 0.4% in October. This is lower than expectations of 0.6%. Year-over-year was expected to be 8% but it came in at 7.7% .These figures seem small, but they affirm that the Fed’s efforts are working and indicate the Fed might be able to ease their efforts to slow the economy! Huge Move in Rates: Mortgage rates (pre-market) have already improved by 1.5 pts! The rates below will be lowered today.”

Clearly Jennifer is excited! And she’s not the only one.

The Dow jumped 1,100 points, and the S&P 500 spiked 5% in biggest rally in two years after light inflation report came out.

So let’s celebrate this win as we go into the holiday weekend… and house hunt!

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