Inflation Watch & Mortgage Rates
Disinflation continued to be the trend in 2023. The Consumer Price Index year-over-year dropped to 3.1% in November, with anticipation that end of year figures will be lower as fuel, auto, travel prices have dropped. This is good news for hopes of lower interest rates in 2024.
API of 3.1% is lower than the mid-year expectation (by only 0.1%) that was used in calculating a reduction in Fed rate increases. The slow reveal for inflation numbers is the shelter market. Most markets have seen a drop for new leases and the 40% increase from late 2022 is just beginning to evaporate through renewals.The drop in the LA-Long Beach-Anaheim region increased slightly to 2.8% but was 0.4% lower than the previous month. Personal income increased 0.4% in November, while consumer spending inched up 0.2%. The GDP latest stats for Q3 show California below the national number (4.8% CA; 4.9% USA)
William Raveis Mortgage regional vice president Melissa Cohn. “I think we can safely say that the peak of mortgage rates in this economic cycle is behind us. The Fed’s pause on rates at the December meeting along with predictions of three rate cuts in 2024 has mortgage rates on the decline. As long as economic data continues to point to the rate of inflation easing toward the Fed’s goal of 2% mortgage rates will go lower for the foreseeable future.”
Please give me a call at Premier Funding Network to answer any of your mortgage questions at 714-283-9900.