In January and the beginning of February, we observed a notable increase in mortgage rates, reaching levels well into the 7% range. This rise was largely influenced by higher-than-expected inflation rates, as indicated by both the Consumer Price Index (CPI) and the Producer Price Index (PPI) reports. However, I am pleased to share that the most recent Personal Consumption Expenditure (PCE) report, which serves as the Federal Reserve's preferred measure of inflation, has revealed a decrease from 2.6% to 2.4% year-over-year. With the Fed's target inflation rate set at 2%, we are approaching this benchmark, which bodes well for the mortgage market.
Despite these fluctuations in interest rates, the mortgage market remains resilient. Serious delinquencies in mortgages, defined as payments over 90 days late, are holding steady at approximately one percent, indicating a favorable level of stability. Additionally, foreclosure rates have remained stagnant at 0.3%, signaling a minimal risk of foreclosure.
Considering these market conditions, we do not foresee any imminent crash in the housing market. On the contrary, we are witnessing an upward trend in prices, making it an opportune time for you to consider refinancing or purchasing a home before rates potentially decrease and stimulate another surge in buying activity.
Should you have any questions or require further clarification, please do not hesitate to reach out to me. I am here to assist you in navigating through your mortgage options with confidence.
