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Mark Hemingway

Mortgage Market Update for April 10th

Thursday, April 11, 2019 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

Higher gas prices along with rising rental prices pushed consumer prices higher in March. The March Consumer Price Index (CPI) rose 0.4% from the 0.2% gain in February, matching estimates. It was the largest increase since January 2018. The Core CPI rose 0.1%, below the 0.2% expected. Year-over-year numbers saw the headline CPI up 1.9% while the Core rate rose 2% from 2.1% in February. Inflation continues to remain subdued.

Mortgage rates continue to hover near more than 12-month lows given the low inflation environment here in the US. The Mortgage Bankers Association (MBA) reports that the 30-year fixed-rate mortgage rose four basis points to 4.40% in the week ending March 29 with an average 0.47 in points. Total mortgage application volume decreased 5.6%, the refinance index decreased 11% while the purchase index increased 0.5%. Mike Fratantoni, MBA Senior Vice President and Chief Economist said, "This spring's lower borrowing costs, coupled with the strong job market, continue to push purchase application volume much higher. Purchase applications are now up more than 13 percent compared to last year at this time."

The MBA also reported this week in its Builder Application Survey that mortgage applications to purchase new homes jumped both monthly and annually. The increase came on the heels of low mortgage rates, rising wages and a strong job market, which should boost the housing market this spring. The MBA said that applications to purchase homes rose 19% in March from February with a 7% gain from March 2018. MBA Senior Vice President and Chief Economist Mike Fratantoni said, "The confluence of declining mortgage rates with the spring buying season is supporting stronger housing demand and activity."

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