30-Year Mortgage Rate Charges Above 4 Percent

2018 has started in a similar fashion to how 2017 finished.

The average 30-year, fixed mortgage rate charged to 4.04 percent this week, up from 3.99 percent the week prior, according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS®). The 15-year, fixed rate averaged 3.49 percent, up from 3.44 percent the week prior, while the five-year, Treasury-indexed hybrid adjustable rate averaged 3.46 percent, the same as the week prior.

“The U.S. weekly average for the 30-year fixed mortgage rate rose above 4 percent for the first time since last summer to 4.04 percent in this week’s survey,” says Len Kiefer, deputy chief economist at Freddie Mac. “This is the highest weekly average for the 30-year fixed rate mortgage since May of 2017. Some may be wondering if this is the last time we’ll see a three handle on the 30-year mortgage rate. Never say never, but inflation is firming, the Federal Reserve’s Beige Book indicates broad-based economic growth, and labor markets are tightening. This means upward pressure on long-term rates, like the 30-year fixed-rate mortgage, is building.”

If rates continue as indicated, the home buying season may come early as potential homebuyers look to jump on the last set of historically low rates. From our perspective; all charts point to several Fed' increases in 2018 and 5% mortgage rates on the horizon.

Considering Buying or Refinancing a Home? Read This....

According to a survey conducted by J.D. Power, 27% of new homeowners ultimately came to regret their choice of lender. Twenty seven percent. The major reason for the dissatisfaction was overall poor customer experience. That's pretty vague so let's dive further. A lack of communication or unmet expectations (again back to communication) topped the "poor customer experience" sub list. Other regrets listed included pressure from the lender to choose a particular product/loan and not closing on time. Communication is a two way street. As a homeowner or potential homebuyer, you can remove some of the tension and turmoil of home loan process by carefully vetting potential lenders. Here are 5 questions to ask potential lenders before you make a commitment.

1. What mortgage programs do you offer? In many cases, choosing the best loan for your specific financial situation requires working with a lender who offers a wide array of loans. You don’t want to work with a lender who tries to push you into one loan simply because that’s the only option from their limited selection. Ask them if they regularly handle the type of loan you are looking for. If the type of loan you are looking for is more specific than say, a conventional fixed-rate mortgage, a little more expertise is useful — and in some cases, it might be necessary. An uncommon home loan like a United States Department of Agriculture loan, for instance, must go through an approved lender.

2. Inquire about the qualifications for the home loan you are seeking. There may be two lenders who offer the same type of loan, but their minimum requirements could differ. For instance, Department of Veterans Affairs loans require a minimum credit score of 620, but a lender might require a minimum score of 640. Comparison-shop. Don’t assume the same type of loan means the same terms.

3. Ask your lender to provide an estimate of the rates and fees expected to pay. Important note here; If you have taxes and insurance tied to your mortgage payment, an initial estimate will never guarantee your final, out-of-pocket expense. Numbers will change as things like title are received or surveys are approved or ordered. That said, it can be a solid jumping-off point for evaluating lenders. If the loan programs are the same, a helpful starting point is to compare the interest rate and total origination costs. It is important to know rates fluctuate, so try comparing lenders on the same day to get the most accurate mortgage rate comparisons. Speaking of rates....

4. Ask when you may be able to do a rate lock. As we mentioned above, mortgage rates can change multiple times a day. They can be as fluid as the stock market. Be sure to ask about the associated fees, including how much it costs to extend the lock should it expire before closing.

5. What is the time estimate for processing my home loan? This is critically important if you are selling a home or coordinating the end of a current lease with a new home purchase. Under the TRID guidelines, it's vitally important you receive your initial closing disclosure four business days before your closing date. In short, get the key dates of the appraisal and underwriting approval. Of course, it’s always a good idea to build in a small buffer if you can — and not just because loan preparation can take longer than expected. Along these lines, make sure you explain that you expect communication in a straightforward and timely manner.

Buying a Home and Have Questions?

Wonderful! Congrats on the decision. We have pulled together some helpful tips to get you started. These go pretty much in order, as most in the real estate industry will tell you it is important to stick with this road map to save yourself and others much anxiety.


How Much House Can You Afford?
Buying a new house is a big investment. You want to be sure that you have all the right finances before proceeding. Spend the time to do a serious audit of your finances and determine a budget. Use an Affordability Calculator to estimate how much you can afford on a house based on your income, savings, debt and assets. Any of Efinity's licensed mortgage professionals can also help with this. Check your credit score. Every year you are allowed one free copy of your credit report.


Get Preapproved For Mortgage
Now that you’ve checked your finances, it is time to see what kind of mortgages you qualify for. Many buyers make the mistake of assuming that being prequalified and preapproved for a mortgage are the same. They are NOT. At Efinity Mortgage at time of application we press deeply into your financial situation and certainly through the application process, an extensive financial background check and a current credit score report.


Find the Right Realtor
A realtor or real estate agent is another great person to have as you maneuver the home buying process. They have the in-depth knowledge on home buying and help you negotiate the purchase. This service is free for the buyer because the realtor is compensated by the seller. You can search online for a realtor at Realtor, Zillow, Trulia. Efinity Mortgage also works with a large number of realtors throughout our network.


Find a Home
You’re finally at the step you’ve been waiting for. Be sure to create a checklist of items you need and want in your future home. This will narrow down the endless choices of homes and help you focus on only the right ones. Also, make a list of your neighborhood preferences like safety, commute, type of schools, local shopping and grocery.


Get a Home Inspection
The home inspection is a step that many home buyers tend to skip over but this is a very important step once you’ve found a home you like. A home inspection checks for any damages to the home’s structure or foundation as well as any major or minor fix-ups that need to be done. Once a thorough home inspection is completed the buyer and seller will receive a report from the home inspector.


Make An Offer
Make an offer with the help of your realtor and don’t be afraid to negotiate price. This may take longer than you think but always be ready if the seller says yes.


Close the Sale
Before you close review all the costs associated with both the purchase and the expected monthly payments. No matter how much time and effort we put forth, it is still amazing to us how often clients gloss over these things. Spend the time and know what you are buying.

The Fiscal Cliff

Following numerous requests from our clients, we thought we would put some effort on summarizing the tax related measures which resulted from the eleventh hour Fiscal Cliff agreement. These new laws are detailed in Senate Amendment to H.R. 8 and are collectively called The American Taxpayer Relief Act of 2012. For those unfamiliar with the Fiscal Cliff, hopefully this may provide valuable background information. We now await the political brinkmanship associated with the negotiations to raise the U.S. Debt Ceiling. Two New Taxes for 2013 Two new taxes go into effect starting January 1, 2013: 1. A 3.8% Net Investment Income Tax (NIIT) applies to individuals, estates and trusts that have unearned investment income above certain threshold amounts. Net Investment Income for the purpose of calculating this tax includes interest, dividends, capital gains, rental and royalty income, non-qualified annuities, income from businesses involved in trading of financial instruments or commodities and pass-through income from a passive business. The NIIT does not apply to municipal bond income. For an individual, the NIIT is equal to 3.8% of the lesser of two amounts: i. An individual’s net investment income or ii. The excess of the individual’s modified adjusted gross income (MAGI) over the threshold amount ($200,000 for individual taxpayers and $250,000 for married couples filing jointly). 2. A 0.9% additional Medicare Tax applies to individual’s wages and self-employment income that exceeds the threshold amount based on the individual’s filing status. Ordinary Income Tax There will be no change in Federal income tax rates for taxpayers earning less than $400,000 ($450,000 for joint filers). Individuals earning above this threshold, will now pay 39.6% on marginal income above $400,000 ($450,000 for joint filers). Capital Gains and Qualified Dividends Tax Effective January 1, 2013, the top tax rate on long term capital gains and qualified dividends reverts back to 20% on gains for taxpayers above the $400,000 ($450,000 joint) income threshold. For taxpayers below these thresholds, the 15% rate remains. This tax rate increase, along with the Medicare tax, will result in a top effective tax rate of 23.8% for long term capital gains and dividends. Similarly, short term capital gains will be taxed at ordinary rates plus the 3.8% NIIT, for an effective top rate of 43.4%. Estate, Gift and Generation Skipping Transfer Tax The credit amount remains at $5 million per individual donor and continues to be inflation-indexed from 2010 (rounded in $10,000 increments). The inflation adjusted credit was $5.12 million in 2012 and is expected to be $5.25 million in 2013. An important component of the new legislation is the reunification of the gift and estate tax credit amount. In other words, the $5.25 million credit is available for use with lifetime gifts or estate transfers at death. The top transfer tax rate on gifts exceeding the credit amount has increased from 35% to 40%. Phase Limitation on Itemized Deductions Before 2010 itemized deductions for taxpayers above a certain income level were partially phased out, thus increasing income taxes as a consequence of reduced deductions. In 2013, if a taxpayer’s Adjusted Gross Income (“AGI”) is above a threshold amount ($250,000 for individual taxpayers, $275,000 for head of households and $300,000 for joint filers), itemized deductions will be reduced by an amount equal to the lesser of 3% of the excess over the threshold or 80% of allowable deductions. Taxpayers apply 80% to the total of their itemized deductions other than the deductions for medical expenses, investment interest, casualty losses and thefts, and gambling losses. As a result of the phase-out of deduction for high income taxpayers, marginal effective tax rates are higher than marginal statutory rates for such taxpayers. Roughly speaking, the 3% reduction of a deduction against income taxed at 43.4% raises the tax rate on marginal income by 1.3 percentage points. Alternative Minimum Tax (AMT) The new bill increases the AMT exemption amounts from $33,750 to $50,500 for individual filers and from $45,000 to $78,750 for joint filers, indexed for inflation from 2013. IRAs The Pension Protection Act of 2006 allowed a taxpayer to exclude from income, distributions of up to $100,000 to a qualified tax-exempt organization (i.e., a public charity but not a supporting organization or a donor advised fund) from a traditional IRA. This provision has been extended for 2012 through December 31, 2013. The distribution must be made directly to the public charity and the IRA owner must have attained age 70½. The distribution will be counted for purposes of the required minimum distributions from an IRA but will be ignored for purposes of computing the limitations on charitable deductions in the year of the gift. Notably, the $100,000 exclusion is per taxpayer so married taxpayers (with their own IRAs) may each take advantage of the provision. Moreover, this provision contains a transition rule, which allows a distribution made in January 2013 to qualify as a 2012 distribution and allows an IRA distribution made December 2012 to qualify if subsequently paid to a qualifying charity in January 2013 (and meeting all other requirements). Roth Conversions In 2012, only the distributable amount (i.e. IRA balances or 401(k) s where the owner has either separated from employment or is over 59½) in pre-tax retirement plans could be converted to Roth accounts. The new bill allows any amount in a non-Roth account to be converted to a Roth account in the same plan, whether or not the amount is distributable. The conversion from a pre-tax retirement plan to a Roth plan results in the recognition of taxable income on all the gains and income in the plan. Retroactive Extension of 100% Exclusion of Small Business Capital Gains Generally, non-corporate taxpayers may exclude 50% of the gain from the sale of small business stock acquired at original issue and held for more than five years. For stock acquired after February 17, 2009 but by September 27, 2010, the exclusion was increased to 75 percent. For stock acquired after September 27, 2010 and before January 1, 2011, the excluded amount was increased to 100%. The 2010 Tax Relief Act further extended the 100% exclusion through December 31, 2011. The new legislation retroactively extends the exclusion of 100% of the gain from Qualified Small Business Stock to stock acquired after September 27, 2010 and before January 1, 2014. Qualifying Small Business Stock is from a C-corporation whose gross assets do not exceed $50 million (including the proceeds received from the issuance of the stock) and who meets a specific active business requirement. The amount of gain eligible for the exclusion is limited to the greater of ten times the taxpayer’s basis in the stock or $10 million of gain from stock in that corporation. Other The personal exemption phase-out has been reinstated, which means that high income taxpayers will have to reduce the total of their personal exemptions by 2% for every $2,500 by which their annual gross income exceeds the threshold amount for their filing status ($250,000 for individual filers, $275,000 for head of households and $300,000 for joint filers), indexed for inflation from 2013.

Oh No They Didn't....

The US Debt Commission charged by the president on balancing the US’ budget, remitted their fiscal austerity plan. Within the proposal was a key ingredient which will greatly affect American homeownership, specifically the income-tax deduction for mortgage interest. The 18-member commission has been looking for ways to trim the federal deficit. Among the $3.8 trillion in debt-cutting options being considered by the “National Commission on Fiscal Responsibility and Reform” was initially written to include the eliminating for second homes mortgages of more than $500,000, and home-equity loans. The final release is a bit more aggressive. It includes a 12% non-refundable tax credit available to all tax payers with mortgages now caped at $500,000. NO credit from interest from second homes and home equity loans. As one might expect, the reaction from various housing industry leaders was a strident “Not A Good Idea”. With its release, the Congress and the President “must decide which tax expenditures to include in the tax code” of which mortgage interest for primary residences is specifically mentioned. I’ll highlight a few of the comments I have found around the news wires:

• “For a battered housing industry, which is struggling with a 21 percent unemployment rate among construction workers, this is absolutely the worst time to be considering changes,” said National Association of Home Builders President Bob Jones. Adding that diminishing or ending the deduction would exert further downward pressure on home prices, leaving more homeowners with mortgages larger than the value of their property and fueling even more foreclosures.
• Mortgage Bankers Association Chairman Michael D. Berman said that while his group’s members shared in the growing concern about the federal deficit, limiting the use of the mortgage-interest deduction “will have negative repercussions for consumers and home values up and down the housing chain.” Given “the fragile state” of the housing market, Berman said, “now is not the time to be scaling back incentives for homeownership.”
• Not to be left out, the National Association of REALTORS® has decided to take a wait and see approach.

There are some supports of this action, may of which are in the economics field. “The mortgage-interest deduction is to housing policy what Social Security reform has traditionally been to politics: the third rail,” says Kevin Gillen, vice president at Econsult Corp. in Philadelphia. He shares a consensus among economists is that the deduction is regressive and promotes overconsumption.

Out of pure selfish reasons, it’s no surprise that I oppose anything but a very limited change relating to interest and tax deduction on all types of homeownership. My suggestion would be to eliminate the interest deduction on all mortgages over $1.5 million and all Non-Owner properties as they typically have additional deductions taken with home improvement. This affects the super rich (or over extended) and the “investor”. The fact that it’s mentioned creates a slippery slope down the road should more severe additional cuts are required. The primary-residence tax and interest deduction is the one almost every American homeowner looks forward to as a way to be rewarded for the risks and costs of owning and maintaining a home. With almost half of the recent homebuyers consisting of first-timers, this tax and interest deduction is critical to the on-going recovery. Any changes in my opinion, even my own suggestions should not be implemented until the housing market is operating normally.


THE NATIONAL COMMISSION ON FISCAL RESPONSIBILITY AND REFORM
http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf

How Do You Eat An Elephant?

Bank of America’s purchase of Countrywide is due to be ratified by CW’s shareholders later this month. This deal was hailed as such a win-win by the US Bank Regulators that a well established law, the Riegel-Neal Interstate Banking and Branching Efficiency Act, instituted a 10 percent cap on market share to prevent an institution from amassing too much power. Bank of America and Countrywide's banking unit will have $773 billion of combined deposits, equal to a 10.9 percent market share. Like Bear Stearns, the Federal Reserve couldn’t allow Countrywide to be insolvent and sought out a partner to take the fat girl to the prom. You can read about their justification here: http://www.federalreserve.gov/newsevents/press/orders/orders20080605a1.pdf
Bank of America is perhaps the most respected bank in the US along with Chase. They are the Goldman Sachs of the industry. That said my concern I’m sure thoroughly discussed in BofA conference rooms; Is B of A taking on to much risk at a time when capital is tightly held in the capital markets? The issue, Countrywide’s Servicing book. CW’ made its mark on the industry from 04’ to 07’ offering Option Arms. As a Thrift, Countywide would have to of secured the performance of many of the loans not sold to the GSE’s. I happen to be the proud owner of a said CW power point presentation (now removed from their website) where they boasted how 68% of the firm’s profitability was derived from Option Arms. Those of you who know about mortgages will understand the complexity of the situation. Option Arms typically have 4 payment options (not three as National City tried to rollout). Borrowers have an “option” to may a 30 yr payment, a 15yr, an Interest Only and a “Minimum Payment”. This amount is less than the interest earned for a given month. So, the remaining amount would be added back into the principal balance. Depending on the loan, when the loan reached 110% or 115% of the original note amount, the loans would move into a full amortization. I spend months on a local DFW radio show explaining how dangerous this product was:
http://radiotime.com/program/p_51173/Legacy_Financials_Power_Hour.aspx
Funny how my career carried me to Bear Stearns and National City, one prominent and one misguided player in this space. Anyway, so now as have a witches brew: A borrower who now has a larger payment than when he/she started, an interest rate which is 75 to 150 basis points higher than the market and less time to pay off the loan, usually 25-26 years if minimum payments were made month 1. Oh, and let’s not add a negative HPA environment which we now find ourselves in.
Countrywide’s story? Countrywide has $27 billion of negative amortization, or payment-option, adjustable- rate mortgages, according to a company regulatory filing. In the first quarter, 8.7 percent of those borrowers were at least three months late on payments, up from 5.4 percent in December and 0.6 percent in the fourth quarter of 2006, the company said. Two-thirds of Countrywide's negative amortization borrowers were making less than full interest payments, and 82 percent of them obtained the mortgages without providing pay stubs or tax returns to prove the income they reported on the loan applications was correct, according to the filings. Over the next 24 months, almost all of these transactions will come due. What then? Is BofA prepared to resolve perhaps up to $12.5B in distressed fixed income securities due to borrower delinquency and foreclosure? If not, things may be really interesting at BofA in the next 18 months.
On Tap for this week, one of the more fun filled weeks regarding this nations' economic situation.

Release Date & Time
Economic Indicator
Consensus Estimate
My Analysis

Mon. June 23,
Empty day.


Tue. June 24, 9:00 a.m. ET
FOMC meeting
This is the first day of a two-day Fed meeting.

Tue. June 24, 10:00 a.m. ET
June Consumer Confidence
57.0 vs. last 57.2
This report will not likely have a notable impact on the direction of mortgage interest rates today

Tue. June 24, 1:00 p.m. ET
Treasury Dept. auctions
$30 bil. of 2-year notes
Uncle Sam will almost surely have to bump up the yield on this offering to attract the desired capital. Investors will be very hesitant to take risks as they await the outcome of the Fed’s monetary policy deliberations currently underway.

Wed. June 25, 8:30 a.m. ET
May Durable Goods Orders
+0.1% vs. last -0.6%
The modest improvement in this index will almost surely go unnoticed as investors pace the floor awaiting the conclusion of today’s Federal Open Market Committee meeting.

Wed. June 25, 10:00 a.m. ET
May New Home Sales
Down 3.00%
New Home Sales are expected to reach a new cycle low in May. Such an outcome is already priced into the mortgage market -- which makes today’s report rather anticlimactic. Look for little, if any change in the trend trajectory of mortgage interest rates as a result of this report.

Wed. June 25, 2:15 p.m. ET
Federal Open Market Committee rate decision and post-meeting statement
Fed fund rate unchanged
Market participants see little chance the Fed will make any change to short-term interest rates. Investors expect the Fed’s post-meeting statement to attempt to strike a balance between policymakers’ increased concern over the chance that inflation pressures will escalate -- and worries that the economy is tracing along the edge of a possible extended recession. If the Fed achieves its objective of talking tough on inflation without leaving the impression an August rate hike is “baked-in-the-cake” -- mortgage interest rates will likely hover near current levels. On the other hand, if investors see the text of the post-meeting statement as containing thinly veiled hints that one or more rate hikes are likely before year-end -- it is almost a sure bet mortgage interest rates will move higher before the end of the week.

Thurs. June 26, 8:30 a.m. ET
Final Estimate Q1 GDP
+1.0% vs. last +0.9%
This old stale bit of economic news will likely do nothing more than take up space on the calendar today.

Thurs. June 26, 8:30 a.m. ET
Initial jobless claims for the week ended 6/21
Down 1,000
This report will likely have little impact on the direction of mortgage interest rates.

Thurs. June 26, 10:00 a.m. ET
May Existing Home Sales
+0.8% vs. last -1.0%
The National Association of Realtors is expected to report that existing home sales are beginning to stabilize. It is far too early to say the worse of the housing crisis has passed – but any sign of improvement is welcome. Look for this data to have little meaningful impact on the direction of mortgage rates today.

Thurs. June 26, 1:00 p.m. ET
Treasury Dept. auctions
$20 bil. of 5-year notes
A non-threatening monetary policy statement from the Fed on Wednesday will go a long way to ramping up demand for these securities. On the other hand, if the Fed leaves investors convinced a rate hike or series or rate hikes are likely before the end of the year the yield on these notes will move higher – dragging mortgage rates higher as well.

Fri. June 27, 8:30 a.m. ET
May Personal Income
Spending
Core PCE Index
+0.4% vs. last +0.2%
+0.6% vs. last +0.2%
0.2% vs. last +0.1%
It is going to be all about the core (excluding food and energy) personal consumption expenditure index today. A reading of 0.2% or less will be supportive of steady to perhaps fractionally lower rates while a number greater than 0.2% will almost certainly produce notably higher rates.

The answer to the question headlining this post is simple. One bite at a time. In dealing with our professional, personal and financial challenges in this market, the only way to address them is to tackle the problem one at a time.

Lastly, I added a survey. Will comment on the results September 1st.

The Fixed Income Week from Hell

Who needs a stiff drink? Good chances are anyone who focus in the RMBS, CMBS markets do. Becuase of global issues, sagging employment (who knew?) and a massive swoon in the stock market, the bond and fixed income rates took a huge beating last week.

As the week begins, the directional trend of mortgage interest rates will likely be most influenced by continued weakness in the stock market, saber rattling between the governments of Israel and Iran and its related impact on oil prices, and the presence of Uncle Sam in the credit market. The most influential economic report of the week will probably be Friday’s May Consumer Price Index figures. Consumers, Fed policymakers and fixed-income investors are becoming increasingly nervous about the likelihood that inflation pressures will continue to mount, even as economic activity levels remain weak.

Despite unemployment numbers, sky-high oil and food prices have pushed the inflation to 3.9% -- well above the Fed’s stated “comfort zone.” More bad news regarding inflation pressure at the consumer level will make it exceptionally difficult for mortgage interest rates to move to notably lower levels. Here's this week's

Release Date & Time
Economic Indicator
Consensus Estimate
Analysis

Mon. June 9, 10:00 a.m. ET
April Pending Home Sales
-0.5% vs. last -1.0%
The trend line still points to weakness in the housing sector. The fact that the rate of declined tapered-off a bit last month will likely leave most market participants unimpressed. This data will likely produce little if any significant change in the mortgage market today.

Tue. June 10,
Most mortgage-backed securities “roll” to July delivery
This is a standard monthly administrative function of the mortgage market. The roughly 25 basis-point downward adjustment in the price of mortgage-backed securities this event creates is already reflected on most investors’ rate sheets.
Wed. June 11, 2:00 p.m. ET
Fed “Beige Book” released
This compilation of economic surveys from each of the twelve Federal Reserve Bank districts will likely draw a bit more attention than usual. It is likely that the data will show an economy skating along the edge of recessionary conditions. If so, look for mortgage interest rates to remain steady to fractionally lower on the day.

Thurs. June 12, 8:30 a.m. ET
May Retail Sales
Ex. Auto
+0.5% vs. last -0.2%
+0.7% vs. last +0.5%
Look for these apparently stronger retail sales figures to be heavily discounted by mortgage investors. Higher prices for gasoline added a large part of the gain in the headline number and government stimulus checks undoubtedly contributed to the run-up in the ex. auto component. If the consensus estimate is within shouting distance of the actual numbers -- this data will not likely influence the trend trajectory of mortgage interest rates much one way or the other.

Thurs. June 13, 8:30 a.m. ET
Initial weekly jobless claims for the week ended 6/7
Up 13,000
Signs of more weakness in the labor sector will tend to be supportive of steady to fractionally lower mortgage interest rates.

Thurs. June 13, 10:00 a.m. ET
April Business Inventories
+0.3% vs. last +0.1%
It is unlikely mortgage investors will give this old bit of second-tier macro-economic data anything more than a passing glance and a yawn.

Thurs. June 13, 1:00 p.m. ET
Treasury auctions
10-year note
Traders try to push bond and note prices down in front of new incoming supply. If they are successful their actions will tend to drag your investors’ rate sheet prices lower as well.

Fri. June 14, 8:30 a.m. ET
May Consumer Price Index
Core Rate
+0.5 vs. last +0.2%
+0.2% vs. last +0.1%
This is one of the Fed’s favorite measures of inflation at the consumer level. Mortgage investors will be keenly focused on these numbers – particularly core consumer prices (a value that excludes the more volatile food and energy components). A core reading of 0.3% or more will almost certainly send rates spiraling higher before the end of the day. It will likely take a core reading of 0.1% or less to encourage mortgage investors to push rates even a fraction lower. Don’t hold your breath hoping for a mortgage market friendly number.