Mortgage rates continued to decline in latest week, Home builder confidence slipped in January, Consumer Prices rose in December

January 18, 2017

Mortgage rates continued to decline in the latest week to the lowest levels not seen since early December. Rates have pushed higher as Mortgage Bond prices plunged and as yields soared after the presidential election results. Investors see the new Trump administration bringing softer regulations, and more pro-growth for the U.S. economy, which pushed investing dollars out of the Bond markets and into Stocks. The Mortgage Bankers Associations reported that the 30-year fixed conventional mortgage ($424,000 or less) fell to 4.27% from 4.32%.

Home builder confidence slipped in January after a sharp rise in December, though it remains in positive territory and well above year-ago levels. The lower numbers this month can be attributed toward higher mortgage rates as well as a lack of lots and access to labor. The National Association of Home Builders Housing Market Index fell two points to 67 in January from the 69 reported in December. All three components in the index declined, which include current sales conditions, sales expectations and buyer traffic. A year-ago, the index was at 61.

The Bureau of Labor Statistics reported on Wednesday that consumer prices rose in December from January led by higher costs for gasoline and housing. The December Consumer Price Index (CPI) rose 0.3% last month, which was in line with expectations and up from the 0.2% gain recorded in December. When stripping out volatile food and energy, the so-called Core CPI was also in line at 0.2%. However, the year-over-year headline CPI rose to 2.1% for all of 2016, well above the 0.7% expected as inflation pressures begin to heat up.