Mortgage Rates and the price of Mortgaged Backed Securities worsened significantly this week, reaching the lowest levels since December 2024. Oil prices spiked this week in response to the conflict in Iran which triggered the Fed futures market to price an 85% chance of a 25bps Fed rate hike next week. The bond market took a dive in response. Rates are up approximately 0.625% from this time last year.
Inflation the Bureau of Labor and Statistics (BLS) released their Consumer Price Index which showed that headline inflation rose 0.4%. Year over year it remained flat at a 3.4% increase. Gasoline rose 4% in August and is up 27% year over year. The Core rate, which strips out food and energy prices, rose 0.3%, while year over year the core rate eased slightlyfrom 2.5% to 2.4% the lowest reading of the year.
Home Sales – the National Association of Realtors released their Existing Home Sales report which showed that closings on existing homes in August (90% of the market) fell 2% to an annualized pace of 3.98M units, the slowest pace in over a year.
Home Values – Cotality released their Home Insights for July which showed values remained stable during the month. Year over year, home values are up 1.4% nationwide.
Oil Prices increased to 99.24 this week this is an increase of $8.65 or nearly 10%. This translates to a roughly $0.22 increase in gas prices at the pump.
Mortgage Applications to purchase homes were flat from last week but are up 4% year over year. Refinance applications declined 6% from last week and are down 25% year over year.