POST TAGSMarket Updates
Blog posted On February 20, 2023
January’s consumer price index (CPI) had a few unexpectedly high numbers last week, which caused some bond market and rate adjustments. Higher numbers on the CPI suggest that inflation is persevering and might take longer to cool down to the 2% target. In short, high inflation = bad for rates. Other factors that have affected rates this month include the strong jobs reports released a few weeks ago. “Generally speaking, higher inflation and stronger economic data mean the Fed is likely to keep short-term rates higher for longer,” writes Matthew Graham of Mortgage News Daily.
Last week wasn’t ALL bad news. The National Association of Home Builders (NAHB) released its monthly home builder sentiment index, which surveys home builders’ perceptions on current sales activity, sales expectations for the next six months, and buyer foot traffic. While the index had been on a steady decline most of last year, it finally showed signs of hope in January of this year. February continued the upward climb, jumping 7 points to reach a level of 42. This is the index’s largest jump in almost 3 years. The index’s component that measures the prospective home sales over the next 6 months climbed by a whopping 11 points, offering hope for the spring market.
This week, we’ll see how the numbers look for January’s existing home sales (tomorrow morning) and new home sales (Friday morning). Both are expected to climb from December’s levels as things begin to heat up for the spring.
Stay tuned for the market updates throughout week!
Sources: Bloomberg, Mortgage News Daily, Mortgage News Daily, Mortgage News Daily