Due to recent market news, mortgage rates have continued to rise. This is because of the announcement made by Federal Reserve Chair Jerome Powell that there will be no rate cuts in the near future due to the strength of the U.S. economy. Despite this increase, the housing market remains robust with demand for new homes seeing an 8.8% increase from February to March. There are currently 543,000 single-family homes on the market, a 3% increase from the previous week and a 31% increase from last year. The rise in mortgage rates has led to an increase in the inventory of unsold homes on the market, according to Mike Simonsen, founder and president of Altos Research. One positive note about the mortgage rates is that the spread between mortgage rates and the 10-year Treasury yield is narrowing, which is a good sign as stated by Mohtashami. The release of the Personal Consumption Expenditures Price Index for March on Friday will provide important information on the Fed’s strategy regarding benchmark interest rates.
