Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update, highlighting mortgage rates, is after the jump.
- The interest rate on the 30-year fixed mortgage rate has decreased by 23 bps over the last 3 weeks to 4.93%.
- The mortgage rate decreased despite a 17 bps increase in the ten year treasury rate since March 1st. The increase in the treasury rate reflected both higher growth prospects based on the latest employment data and indications by the European Central Bank that they were likely to raise interest rates to fight inflation in the Euro Area.
- Annual inflation expectations in the U.S. over the next ten years increased to just below 2.5%. Higher inflation expectations and growth prospects will put upward pressure on long term interest rates, including mortgage rates. However, greater consumer demand and improved employment will buttress housing demand and offset some of the effects of increased borrowing costs.