Mortgage Rate Update June 25, 2015

Mortgage rates are mostly unchanged from the beginning of the week.

Interest rates have been choppy this week.  On Monday it appeared that mortgage rates were headed higher on news that Greece was close to reaching a deal with their creditors.  However, news emerged yesterday that its creditors would not accept the proposal.  Therefore, rates improved.  And today rates appear headed higher on better than expected economic news.Inflation concept.

This morning’s read on inflation came from the Personal Consumption Expenditure price index (PCE).  It showed that on a year-over-year basis consumer prices rose by only 1.2% here in the US.  This is well below the Fed’s target of 2% and will make it hard for the Fed to raise rates.

What is interesting is the Consumer Price Index, a separate measure of inflation, is currently reporting a +1.8% year-over-year increase so the disconnect may make it hard for the Fed to really know what price pressures exist in the economy.

In a separate release weekly jobless claims were shown to remain near historic lows.  The employment picture in the US remains strong but inflation is tame.  Inflation will come and when it does it will pressure interest rates higher.

Current Outlook: locking

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