Mortgage Rates This Week – February 13, 2024

After two volatile days following two hotter-than-expected inflation reports, mortgage rates are right back to where they started but still higher than last week. The 30-year fixed rate currently sits at 6.125%, 6.372% APR with points, and 6.750%, 6.796% APR with 0 points for borrowers with excellent credit and 25% down on a Single-Family Primary Residence.

Today, the Producer Price Index (PPI), which measures wholesale inflation, came in above expectations at 0.4% in January and 3.5% year over year, which was also hotter than expected. The increase was primarily due to revisions to the December inflation data which was revised higher by 0.2%. The core rate, which strips out food and energy prices, was up 0.3%, which was in line with expectations. The annual rate came in at 3.6%, which was technically down from 3.7%, but again this was due to December’s report being revised higher. Overall, this report would generally cause rates to move higher; however, today’s rates did the opposite and moved lower following the news, reversing yesterday’s rate increase following the CPI report.

The Consumer Price Index (CPI) showed inflation rising 0.5% for the month and increasing from 2.9% to 3.0% year-over-year, well above estimates. The core reading, which removes volatile food and energy costs, increased 0.4% in January and moved up from 3.2% to 3.3% annually. Shelter costs continue to keep inflation elevated, accounting for nearly 50% of the increase in inflation. Shelter costs remain a thorn in the side of those hoping for lower inflation. Despite current data showing the opposite, the BLS continues to report shelter costs increasing substantially and a big driver of inflation being higher than the Fed’s 2% target rate. In addition to shelter, other factors include used cars, motor vehicle insurance, and eggs. Eggs prices have skyrocketed in recent weeks due to shortages from the bird flu hitting poultry producers.  Mortgage rates shot higher following the report, as this report makes it all but certain that the Fed will hold off on cutting rates through the first half of the year.

The monthly Bureau of Labor Statistics (BLS) report for January came in slightly weaker than expected, adding 143k jobs for the month; however, the previous two months were revised higher by 100k jobs, limiting the market’s reaction to the report. The closely watched unemployment rate fell to 4.0% from 4.1%. The falling unemployment rate has been pressuring mortgage rates the past couple of months, and as long as employment remains strong, it will be difficult for rates to drop much from current levels.

A positive piece of news was Treasury Secretary Scott Bessent saying publicly that he and President Trump are focused on the 10-year Treasury and want to see lower long-term rates. This is on the heels of President Trump’s previous efforts to pressure the Fed to lower rates. If the White House shifts focus from the Fed to long-term rates and pushes policy to support lower long-term rates, we could see the bond market react favorably, and help rates move lower, especially if significant headway is made on limiting government spending. This would be far more helpful to the mortgage and real estate industry than the Fed just lowering rates, especially at a time when declining inflation has stalled out. As we’ve seen over the past several months, the Fed cutting rates doesn’t help long-term rates if there are consumer and wage inflation concerns.

The Fed’s favorite measure of inflation (PCE), Personal Consumption Expenditures, showed headline inflation rose  0.3% for the month, with year-over-year inflation rising from 2.4% to 2.6%. The core rate, which excludes volatile food and energy costs, also rose 0.2%, and annual core inflation was flat at 2.8%. Shelter remains a key driver of inflation; however, both PCE and CPI calculate shelter costs on a lagging basis. According to the PCE data, shelter was the biggest contributor to inflation, rising by 5% yearly. Compare that to real-time data from CoreLogic showing Shelter increasing by just 2%, and hopefully, it’s only a matter of time before the data catches up in the inflation reports.

Purchase demand, as expected, has spiked to start the year following a trend we’ve seen every year since COVID, as the spring buying season continues to start earlier and earlier. This year, inventory seems to be better than in the past couple of years, as our clients are having an easier time getting their offers accepted. Competition is still strong; however, more homes to choose from have benefited home buyers in the small sample size we’ve seen. Clients who choose to get a fully underwritten preapproval are seeing more success getting offers accepted on high-demand homes.

To find the most affordable rate, compare different lenders and collaborate with a company that offers transparent mortgage rates and costs online. Experienced Mortgage Advisors and Loan Officers can guide you through the current market conditions and chart the most effective course forward.

Current Mortgage Rates This Week for WA, OR, ID, CA, and CO From Sammamish Mortgage
02/21/2025

**Conforming assumptions – $800k Purchase Price, 25% Down, 800+ Credit
**Jumbo assumptions – $1.5MM Purchase Price, 25% Down, 800+ Credit

Washington State mortgage rates

Mortgage rates In Oregon

Mortgage rates in Idaho

Mortgage Rates for Colorado

California Mortgage Rates

National Average Mortgage Rates:

(State-specific rates sourced from Sammamish Mortgage – National Average rates sourced from Zillow)

Consumer Price Index, Consumer Sentiment & Inflation

Without a doubt, the biggest driver of interest rates is inflation. With that in mind, we continue to focus on inflation data and expectations going forward to gauge what we can expect to see interest rates in the coming months. Current inflation is running well above the Fed’s annual target of 2%, pushing the Fed’s hand to raise short-term rates to slow things down. While current numbers remain elevated, we expect a significant reduction in the inflation readings in the coming months as various factors moderate the pace of inflation.

Consumer Price Index (CPI) November = -0.5% – Annual = 3.0%  

Producer Price Index (PPI) November = 0.4% – Annual = 3.5%

Personal Consumption Expenditures (PCE) October = 0.3% – Annual = 2.6% 

Overall, it is difficult to predict what will happen with mortgage rates in the near term. With global economic turmoil, banking issues, inflation, and thus far a far more resilient economy than many expected, trying to predict rates from one day to the next to time a rate lock is almost impossible or at least requires luck. However, looking at a longer time horizon, it’s much easier to see that there is an excellent chance we could see rates move lower from current levels, providing an opportunity for recent and existing buyers to potentially refinance in the future.

See Current Rates

What the Fed rate hike means for borrowers, savers, and investors

When the Federal Reserve raises interest rates, it affects various aspects of the economy, including the housing market, savings, and investment.

For potential homebuyers, a Fed rate hike typically leads to an increase in mortgage rates in the early stages of a tightening cycle; however, if the market thinks the Fed rate increases will hurt the economy and cause inflation to decrease, mortgage rates can improve when the Fed raises the Fed Funds Rate. It’s important to note that the Fed does not control mortgage rates. Fed rate increases do directly impact credit card rates, car loans, and commercial loans, which are shorter in duration than a typical 30-year fixed mortgage.

For savers, a Fed rate hike may lead to higher returns on savings accounts and certificates of deposit (CDs). In addition, banks and other financial institutions may increase the interest rates they pay to savers to remain competitive, which can benefit savers looking to earn more on their savings.

A Fed rate hike may impact the stock and bond markets for investors. Typically, when interest rates rise, the value of stocks and bonds can fall as investors may shift their money to fixed-income investments with higher returns. However, the impact of a rate hike on the markets can be complex and depends on various factors, such as the overall state of the economy, inflation expectations, and global events.

Loan Limits Increased For 2025

Loan limits have increased for 2025. Each county in every state has its loan limit. That said, the new standard conforming loan limit is $806,500, and high balance limits in select high-priced areas can go up as high as $1,037,300 for 1-unit properties in 2024.

Visit our 2025 conforming loan limit pages for Washington State, Oregon, Idaho, California,, and Colorado.

For FHA loan limits for 2025, visit our pages for Washington State, Idaho, Colorado, California and Oregon.

Check out our mortgage loan limit tool for conventional, FHA, and VA loans.

Instant Mortgage Rate Quote

Ready to Apply For a Mortgage?

Do you have questions about rates this week and home loans? Or are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, Colorado & California. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Our programs include the Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Contact us today with any questions you have about mortgages.

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