Mike's Weekly Rate Commentary | Home Loan Mortgage

Today’s Mortgage Rates in July 2024

Mortgage Mike
Mortgage Mike
July 15, 2024 | 18 Minute Read

July 15, 2024

Yields on the 10-Year Treasury Note hit a hard floor of support on Friday and are now moving higher. The safe play remains to lock.

Last Weekend – What It Means for Your Wallet

As our nation continues to process the heinous and evil attempted assassination on former President Trump’s life, we are seeing a growing and strengthening base form around Trump, which is making his reelection bid highly probable at this point in the election cycle. As a result, we can expect to see market changes in anticipation of what investors feel a Trump presidency will bring. If the economists polled by the WSJ are accurate, we would likely see inflationary pressures increase, which is not good news for mortgage interest rates.

They based their beliefs upon expectations of lower tax rates, increased tariffs, and reduced regulation. However, this opinion is also disputed by other reputable sources. On the flip side of this, a Trump presidency is also expected to lower the odds of a recession. So, while it may not be good for interest rates, it could reduce the likelihood of our country facing high levels of job loss. We will have to see how the market responds in the months to come.

Bankruptcy Boom: A Troubling Trend 📈

Corporate bankruptcies just hit a 13 year high, clocking in at 346 year-to-date filings. In June alone, there were 75, which is the highest monthly number since the start of the pandemic when many businesses were failing due to lockdowns. This is not a good sign for the future economic outlook for US businesses and could be a beginning of a more serious issue.

If we do see further slowing in consumer spending, that will hurt business earnings and eventually lead to more layoffs. As Fed Chairman Powell acknowledged his testimony on Capitol Hill last week, delaying too long to cut rates, or not cutting fast enough, puts the US at risk of a recession. Hopefully, this means the Fed will act no later than the September meeting to begin cutting rates and will increase the pace of projected cuts in the future.

Inflation Down, Hopes Up: The Fed’s Next Move 🏡

Last Thursday’s Consumer Price Index (CPI) report showed that consumer inflation continues to fall. Overall inflation was negative by .1%, which brought the annualized rate down from 3.27% to 2.98%. When you remove volatile food and energy prices, the Core rate increased by .1%, taking the annualized rate from 3.41% down to 3.28%. This is great news for the Federal Reserve and clears the path for the Fed to target September for the first rate cut. Once we have the Fed adding support to the interest rate market, we can expect to see home buyer demand improve, which is very much needed to add oxygen to the housing and mortgage industries who have been starving for the past two years.


July 08, 2024

We have had a nice improvement following Friday’s softening labor market report. For rates to move lower, the 10-Year Treasury Note yield will have to fall below a significant floor of support. That is not likely to happen without news showing the economy or inflation is further stalling. The risk of floating at this point is elevated.

🏠 Post-Peak Housing Hustle: What’s Next?

With June behind us, we have now passed the peak of the home buying season. This means that we can expect to find that the number of new listings hitting the market will slow. However, the total home inventory will likely not peak until some time around October. We are already seeing home price appreciation rates slow, with many believing that the rate of home value growth will stall by the end of 2024 and be relatively flat in 2025.

At the same time, the total volume of homes being transacted remains at desperately low levels, which is terrible news for those in the mortgage and real estate industries. Of course, a surprise drop in mortgage interest rates could fuel a surge of home buyers that could buck the trends we typically see as we head into the slower season of winter.

📊Job Market Rollercoaster: BLS Report Breakdown

Friday’s Bureau of Labor Statistics (BLS) report showed that there were 206,000 new jobs created in the month of June, which was a little above the estimate of 190,000 – 200,000. Most importantly, there were 110,000 reductions to the prior two months’ reports. This trend of the BLS initially showing a strong number, only to come in months later and say, oops, we were wrong, continues to frustrate the mortgage industry. If accurate numbers were reported at the time of initial release, we would have had less panic selling in the bond market, which means interest rates would not have risen as high as they did immediately after the over-stated release. 

Another good piece of news contained in the report was that the unemployment rate rose from 4% up to 4.1%. This shows a continual weakening of the labor market, which is exactly what the Fed is hoping for. At this point, there is plenty justification to cut rates. The current level of the Fed Fund Rate is too high to justify the realities of inflation now only .6% away from the Fed’s 2% target, combined with a labor market that is clearly showing signs of distress.

📈 Inflation Watch: CPI Report Coming Up

Thursday’s Consumer Price Index (PC) report will show consumer inflation for the month of June. While the monthly rate of increase for Core inflation (inflation less volatile food and energy prices) is only expected to be between .2% to .28%, the annualized rate is not anticipated to show any reduction, or it could move slightly higher. This would not be great news for mortgage interest rates, as markets generally only respond positively to reports that show annualized inflation numbers coming down.


July 01, 2024

With rates jumping significantly higher, we will maintain our locking bias.

📈 Biden, Trump, and Your Mortgage: The Debate That Raised Rates

Mortgage rates have jumped 3/8% higher since Friday morning, heavily driven by the self-admitted dismal debate performance by President Joe Biden. According to Bloomberg, PredictIt, odds of a Trump victory jumped up near 60%, while Biden’s odds of a victory fell below 30%. Right or wrong, financial traders are betting that a Trump presidency will slow economic growth and spur inflation with Trump’s plans to deport undocumented immigrants and ramp up threats of increased tariffs against China. Therefore, many financial institutions are putting in place defensive positions to hedge against a bump in inflation. This has put upward pressure on longer maturing bonds, which directly influence mortgage rates. While this would likely add pressure to the Fed to reduce short term interest rates, longer term maturities are expected to climb. Translation, we may see even higher for longer than what was currently priced into the markets.

🧊 Inflation Takes a Chill Pill, But Rates Still Stuck

Friday’s Personal Consumption Expenditure (PCE) report showed that consumer inflation in the month of May was very tame, which had it not been for political concerns, would have driven mortgage rates down lower. The headline number showed a 0% growth in consumer inflation in May, while the Core rate (which strips out volatile food and energy prices, rose by .1%. This brings the Core annualized rate down to 2.6% from the previous report of 2.8%. We are now within .6% of the Fed’s target rate of consumer inflation, which certainly supports the Fed dropping the Fed Funds rate by September.

📊 Jobs Week: Will the Labor Market Shake Up Rate Cut Hopes?

This is jobs week, where on Friday we will receive the Bureau of Labor Statistics (BLS) report of how non-farm payrolls may have been added in the month of June. It is imperative that this number does not show a rapidly growing labor market. Now that we are seeing inflation getting close to the Fed’s target rate, we now need to see a weakening labor market to jumpstart the Fed’s plan to cut interest rates. A strong report will push back any hopes of a July cut for sure, but a weak report would put a July cut as a low probability, but still possible chance of a rate cut.


June 26, 2024

We are hopeful that rates will improve following Friday’s important PCE release. However, the risk of floating remains high, as bond prices would need to break through important floors for this to happen. The safe play remains to lock until we have confirmation of rates breaking beneath the current floor.

Inflation Report Showdown: Will Mortgage Rates Budge? 🧐📉

Mortgage rates have been stable the past weeks, as investors await news that will provide more clear direction on either inflation or the labor market. They could receive what they are looking for on Friday, when the Fed’s favorite gauge of consumer inflation is released showing results for May.

Expectations for the Personal Consumption’s Expenditures (PCE) report is for consumer prices, after removing volatile food and energy prices, to show only a .1% gain, which would be very good news for mortgage rates. On an annualized basis, this would reduce the pace of inflation from 2.8% down to 2.6%. While still a way away from the Fed’s target rate of 2%, this would be the lowest growth rate reported since March of 2021. 

Home Prices Keep Climbing: The Fed’s No-Win Situation 🏠💸

Despite high mortgage rates and extremely depressed levels of sales, home prices in the US continue to climb. According to the Case Shiller Home Price Index, home values grew by .3% in the month of April, once again setting new all-time high levels. While the Fed works to curb demand with higher rates, its efforts have massively decreased supply, leading to the equivalent to supply chain shortage inflation in the housing market.

At this point, the fear is that lower mortgage rates would release pent up demand, which could further fuel appreciation with an increased pool of buyers. This is no win situation for the Fed, which is now backed into a corner without a clear path to prevent further housing-based inflation rallies. 

Deficit Drama: Uncle Sam’s $2 Trillion Oopsie 💰😱

It was recently announced by the Congressional Budget Office that estimate of federal deficit spending for 2024 has increased from $1.6 trillion up to $2 trillion. Oopsies. Just a 25% miss…. The increase can be largely attributed to recent student loan forgiveness plans, as well as war funding Ukraine and Israel, in addition to social security and rising health care expenses.

The downside to this is that the Federal government now needs to sell more treasuries to fund the deficit, which will apply massive upward pressure on treasury rates to attract enough interest from private investors. Since mortgage rates and treasury rates have a symbiotic relationship, higher treasury rates equate to higher mortgage rates. Just when expectations of lower rates bring excitement to the real estate and mortgage communities, bam!  We get hit with another gut punch. 


June 17, 2024

Mortgage rates are climbing today, but they are in the early stages of a downward trend. Unless this positive trend is interrupted, we can expect to see rates move lower in the coming days and weeks. Let’s hope this trend continues.

US Home Sales Decline 🏠📉

Last month, US home sales plummeted to a low point seen only twice in the past decade. A combination of limited inventory, elevated interest rates, and high home prices is straining the housing market, leaving many potential buyers on the sidelines, waiting for either prices or interest rates to drop before committing to a purchase. Despite the slowdown, home prices have continued to climb, leading to a situation akin to stagflation within the housing market. This occurs when an industry or economy experiences a recession while inflation drives prices higher. For a sustainable recovery, either home prices or interest rates need to decrease.

Retail Sales Impact on Mortgage Rates 📊💵

Tuesday is a crucial day for mortgage rates this week, with the release of Retail Sales data for May. The previous report showed a significant and unexpected dip in consumer behavior in April, which helped mortgage rates drop by 0.25%. If this trend continues in the May report, we could see further softening of rates. However, a surprise increase in retail sales would negatively impact interest rates. Currently, credit card and car loan delinquencies are at their highest levels since 2012, indicating consumer distress. This financial strain will likely lead to a slowdown in consumer spending over time.

Consumer Price Index (CPI) Trends 📉📊

Last week’s CPI report showed that consumer inflation continues to soften, fueling hope that the Federal Reserve might implement more than one rate cut before the end of 2024. Although the Fed acknowledges the lower inflation figures, they are waiting for a sustained trend of declining inflation before committing to further rate cuts.


June 10, 2024

Without much good news likely to hit the wires this week, we will suggest a locking bias.

Jobs Surge and Mortgage Rates Feel the Heat 💼📈

Friday’s Bureau of Labor Statistics (BLS) Jobs Report showed that there were 272,000 new jobs created in the month of May. This was much stronger than the 185,000 that was anticipated by the markets. This virtually wiped out all the improvements we experienced in mortgage rates last week. This also serves as a reminder that we need to see a slow down in the labor market before we can expect the Fed to cut rates.

On the good side, the Unemployment Rate did tick up from 3.9% up to 4%. The Federal Reserve wants this to climb up to 4.3% or higher. That will provide them the comfort of knowing that the labor market has sufficiently weakened to a point where we will see a slow down in the pace of wage growth.

Fed Week: All Eyes on Powell’s Next Move 🎙️

It is again Fed week, where the Fed is expected to again hold the Feds Funds rate at the current multi-decade high levels. While the assumption at the start of 2024 was to have 6 rate cuts in 2024, current expectations are for the Fed to cut either one or two times in 2024. Many are not anticipating any cuts in 2024 at all, which would be terrible news for mortgage rates.

After the Fed announcement, Fed President Jerome Powell will be making his statements, where we hope to get more direction on the future of rates. We expect him to continue his hawkish tone on the future of inflation, which will not likely provide much hope that we will see any meaningful improvements to mortgage rate in the near term.

CPI Report: Inflation and the Shelter Effect 🏠🔥

On Wednesday, we will also get an update on consumer inflation form the Consumer Price Index report (CPI). Since this report is heavily influenced by shelter and housing, we don’t expect this report to be helpful to mortgage rates. Shelter inflation has been strong, which is partially why consumer inflation has remained so stubborn.


June 3, 2024

I suggest floating, as long as the yield on the 10-Year remains beneath 4.5%. If it does break above this critical threshold, lock.

Inflation Stays Steady: A Glimmer of Hope? 🌟

Last Friday’s Personal Consumption Expenditures (PCE) report showed that consumer inflation rose by .3%, which held the annualized rate stable at 2.7%. When you strip out volatile food and energy process, the Core rate increased by .249%, which lowered the annualized rate of the Federal Reserve’s favorite gauge of consumer inflation from 2.813 down to 2.75%. While we still are ¾% above the Fed’s target rate of 2%, we have made significant progress toward the goal in recent months.

Consumers Tapped Out: Spending Slows and Savings Stagnate 🛑

It was also reported that consumer spending increased by .2% in the month of April, which was lower than anticipated, and much lower than the .8% reading from the month prior. In addition, the savings rate remained at 3.6%, which is the lowest level since November 2022. Both of these reports indicate that the consumer may be becoming financially exhausted and fatigued in the current environment of high inflation and high interest rates. This theory is also noticeable by looking at credit card delinquency rates, which have moved sharply higher in recent months.

Fed’s New Game Plan: More Treasuries, Lower Rates? 🎯

It is now June, which means that the Federal Reserve will now be reinvesting an additional $35 billion a month into 10-Year Treasury Notes. This is the first step in the Fed’s plan to slow the pace of Quantitative Tightening, which will help support lower mortgage interest rates in the months ahead. Hopefully, this will provide the extra power needed for yields to break beneath a trading channel that has been in place since late 2023. If that happens, we could start to see mortgage rates for a downward trend, just in time for the summer purchase season.


May 20, 2024

Given the strong support level currently holding back rate improvements, now might be a prudent time to lock in rates.

Increase Taxes or Cut Spending 📉💸

The US federal debt has now exceeded $34.5 trillion, marking a more than 50% increase since 2019. This surge in government spending creates a misleading appearance of economic strength by injecting borrowed money into the economy. However, it has also driven the rapid inflation causing significant hardship for the lower and middle classes, who are less equipped to handle rising consumer prices. The only viable solutions to curb inflation are for the government to reduce spending or increase taxes, both of which face considerable political resistance.

Inflation Trends 📊💵

Last week’s CPI report indicated a 0.3% inflation rate for April, which was below the anticipated 0.4%. While this lower-than-expected rate helped ease mortgage interest rates slightly, a 0.3% monthly increase is still above the average 0.167% required to achieve the Fed’s 2% annual inflation target. This report suggests no immediate need to raise rates further, but it also doesn’t justify any near-term rate cuts. We still hope to see 2-3 rate cuts in 2023, but this hinges on continued slowing in price growth in the upcoming months.

Treasury Yields and Mortgage Rates 📉📊

After three weeks of declining rates, yields on the 10-Year Treasury Note have hit a strong support level that has held since last December. Given the strength of this support, meaningful improvements in mortgage rates are unlikely until yields on the 10-Year Treasury break below this level. The next significant inflation report, the Personal Consumption Expenditure (PCE) report, will be released on May 31st. As the Fed’s preferred measure of inflation, this report will significantly influence the long-term direction of mortgage rates. However, with the ongoing headwinds of massive government deficit spending, an acceptable pace of price growth seems unlikely.


May 13, 2024

The upcoming CPI report poses considerable risk for floating mortgage rates. Only opt to float if you’re prepared to weather potential rate increases post-Wednesday’s release.

Consumer Debt Surpasses All-Time Highs 📈💳💰

Consumer debt in the US continues its upward trajectory, hitting record highs, fueled in part by homeowners tapping into home equity loans for various purposes. With interest rates at elevated levels, the cost of servicing this debt has soared, raising concerns about financial strain, especially if wage growth decelerates. Economists are puzzled by consumers’ continued aggressive spending habits. My belief is that the extra cash is a product of wages continue to rise while so many people are locked into low mortgage payments.

CPI Report Impact on Mortgage Rates 📉💲📊

Wednesday brings the much-anticipated Consumer Price Index (CPI) report, offering insights into consumer inflation. Investors are bracing for potential market shifts, with mortgage rates likely to hold steady in the lead-up to the release. Optimism about declining inflation in recent weeks has tempered rate movements. However, an unexpected inflation uptick could drive rates higher, while confirmation of slowing inflation could signal a downward trajectory for rates.

Biden Administration’s Tariff Announcement

The Biden Administration unveiled significant tariffs on Chinese imports, particularly targeting green energy products. This move aims to bolster US companies unable to match China’s pricing, affecting electric vehicle and solar equipment costs. Homeowners considering solar installations may want to act promptly before potential price increases take effect.


May 6, 2024

After a nice week, mortgage rates are starting today above their 200-day moving average. If this holds, we can expect to see rates improve in the near term. However, floating remains risky. Do so only if you are willing to take the chance of a reversal in this downward move.

Job Report Surprise: Fed’s Rate Cut Hopes Soar📉

Last week’s Bureau of Labor Statistics (BLS) report delivered a jaw-dropping twist that left economists doing double takes. Job creations for April fell short of expectations, sending ripples of excitement through the Federal Reserve. With only 175,000 jobs on the books against the anticipated 243,000, the stage is set for potential rate cuts in 2024.

Plus, the Unemployment Rate taking a leap from 3.8% to 3.9% has folks crossing fingers that higher interest rates might just cool down the red-hot labor market. Are we in for some rate cut action? Stay tuned!

Fed’s Balance Sheet Moves: Surfing the Waves of Liquidity🌊

The Federal Reserve’s latest move is making waves in the bond market! While interest rates stayed put last week, the Fed’s announcement to ease up on their balance sheet reduction plan is causing a stir. How, you ask? By injecting extra liquidity into the bond market, the Fed aims to tackle the government’s deficit spending head-on. And here’s the kicker: this liquidity boost is poised to trickle down to the mortgage bond market, ushering in potential drops in mortgage interest rates down the line. Hang tight, mortgage enthusiasts, because smoother sailing might just be on the horizon!

Recession Whispers: The Tale of a Rolling Economic Tide🌀

Economic rollercoaster, anyone? While the US economy hasn’t plunged into a full-blown recession, whispers of a “rolling recession” are keeping us all on our toes. Picture this: after a wild ride, the manufacturing industry took a gut punch but is now flexing its muscles again. Meanwhile, the real estate market is navigating choppy waters, and guess what? The service industry, once the poster child of post-COVID expansion, is now tapping the brakes and flirting with contraction territory. What does this mean for the Fed and interest rates? Could a slowdown be looming on the horizon? Hold onto your hats, folks, because the economic tide might just be shifting.