Share“The inflation rate is not contained but moving ever so slightly into a better spot. The conquering of inflation will be a key factor in bringing down the mortgage rates, which so far have refused to budge even as the Federal Reserve has been cutting other interest rates.
The overall consumer price rose by 2.9% to close out 2024. It is expected to go down further because the heavyweight components of shelter costs are decelerating, as rents and home prices are no longer rising as strongly. The latest 4.5% rise in shelter costs appears high but marks the slowest gain in three years. Various non-official private sector data are pointing towards no growth in apartment rent due to the vast oversupply of new empty units hitting the market.
Moreover, with oil prices falling by about 30% from three years ago, more calming effects on inflation are embedded in the future inflation data. Mortgage rates will move slightly lower – perhaps to 6.5% just in time for the spring home-buying season.”
