Inflation and Mortgage Rates

The Fed's PREFERRED method for measuring inflation, the PCE (Personal Consumption Expenditures), shows that prices are steadily about 6.3% higher than they were a year ago.

The bright side?

Mortgage rates improve when inflation improves! This things-are-at-the-same-level news is actually a good thing, considering where the CPI (another inflation measurement) was a few weeks ago.

The CPI told us inflation was still getting worse a few weeks ago, causing markets to respond poorly and pushing mortgage rates up.

I am still advising clients lock their rates ASAP, as things could continue to get worse before they get better. We do offer some nice programs to allow for 'floating down' to market rates if rates improved after you are locked.

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We have a free 'TBD lock' program which locks an interest rate in for up to 90 days AND allows for a 'float down' to the market rate if rates are better once you are under contract on a home.

Example (not an offer of a rate):
- lock today at 6.00% for 90 days
- if mortgage rate market is BETTER once you are under contract*, say 5.75%, you will get that rate
- if it is the same or worse, you will get 6.00% in this example

*you need to actually get under contract and close within the 90 days (we can extend your lock up to 30 days, if need be)