Now that Greece has a bailout deal in place, the situation there had very little influence on mortgage rates over the past few days. The economic data released in the past week also didn't impact rates and overall mortgage rates ended slightly lower.
The housing data released this week was positive. June existing home sales increased 3% from May to the highest level since Feb 2007 and they were 10% higher than a year ago. Strong demand and limited inventory continued to push prices higher and the median existing home price reached an all-time high. Total housing inventory did increase slightly in June, but it remains low by historical standards. Existing home sales account for roughly 90% of all single-family home purchases. I have heard from several potential buyers that they need to be ready to write an offer on a new listing quickly, especially on some of the lower priced homes.
The most recent reading for the Consumer Price Index (CPI) showed that core inflation continued to hold steady. June Core CPI, which excludes the volatile food and energy components, was 1.8% higher than a year ago. Core CPI has remained close to this level for more than two years. The Fed’s target for core inflation is 2.0%. Since mortgage rates are heavily influenced by inflation rates, these readings have helped keep mortgage rates low.
Looking ahead, the next Fed meeting will take place on July 29. Investors will be looking for information about the timing of the first federal funds rate hike. New Home Sales will be released on July 24. Durable Orders, an important indicator of economic activity, will come out on July 27. Pending Home Sales will be released on July 29. All of these reports could sway mortgage interest rates depending on what the report says – we won't know until the report is released.
Mortgage rates are great- if you are looking to buy a new home, now is a great time to buy or refinance!