Mortgage Rate Forecast This Week – January 8th, 2024
FOMC Minutes and Economic Insights
With the release of the first FOMC minutes of the year, it sets the tone for the potential actions of the Federal Reserve. The Fed remains steadfast in their current stance of not implementing any rate cuts. However, recent end-of-year reports suggest a likelihood of rate cuts in the coming months. The most recent rate change occurred in July of the previous year.
S&P Global US Manufacturing PMI
The Manufacturing PMI was revised lower to 47.9 in December 2023 from a preliminary figure of 48.2. This marks a decline from the November reading of 49.4, indicating a more significant deterioration in manufacturing conditions.
FOMC Minutes Insights
According to the FOMC minutes, several officials believe the Fed might need to keep its benchmark rate steady “for longer than they currently anticipated.” Additionally, some officials advocate for easing monetary policy. The dovish officials emphasized the uncertainty associated with maintaining a restrictive monetary policy stance for an extended period and the potential downside risks to the economy.
Non-farm Payrolls
The unemployment rate remained unchanged at 3.7% in December, near a half-century low, as reported by the government.
Primary Mortgage Market Survey Index
- 15-Year Fixed-Rate Mortgage rates experienced a week-to-week decrease of -0.04%, with the current rate at 5.89%.
- 30-Year Fixed-Rate Mortgage rates saw a week-to-week increase of 0.01%, with the current rate at 6.62%.
MND Rate Index
- 30-Year FHA rates increased by 0.08% for the week, with current rates at 6.16%.
- 30-Year VA rates also saw a 0.08% increase for the week, with current rates at 6.16%.
Jobless Claims
Initial Claims were reported at 202,000, lower than the expected claims of 220,000, with the prior week’s figure at 216,000.
What’s on the Horizon
Following this week’s FOMC minutes, the upcoming week will be relatively light on economic releases. The primary report of note will be the Consumer Price Index and Producer Price Index, providing insights into the inflation rates for December.
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