Mortgage Rates This Week – November 14, 2024

With the election finally behind us, mortgage rates find themselves in a fairly tight range, sitting at the same levels we saw last summer. Rates started moving higher in the weeks leading up to the election as the markets began anticipating a Trump victory and a possible red sweep of Congress. When those expectations became a reality, we saw an immediate pop in rates; however, that increase was short-lived as things quickly corrected back to pre-election levels. Now that the chaos of election season is over, the markets can slowly get back to reacting to actual economic data instead of the betting markets trying to predict the next President. The 30-year fixed rate currently sits at 6.000%, 6.245% 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.

Yesterday, the October Consumer Price Index (CPI) showed inflation rising 0.2% for the month and increasing from 2.4% to 2.6% year-over-year, both in line with market expectations. The core reading, which removes volatile food and energy costs, increased 0.3% in October and remained at 3.1% annually, also as expected. Shelter costs continue to keep inflation elevated, accounting for nearly 50% of the increase in inflation. We have now seen Shelter costs, as determined by the BLS (Bureau of Labor Statistics), far outpace actual housing costs reflected by other data providers. Many economists, including the Fed, point to a lag in the BLS reporting as the reason Shelter costs have remained high; however, this trend has been going on for over a year. At some point, we have to either see Shelter inflation decline or stop putting weight into data that doesn’t seem to reflect reality.

The Producer Price Index (PPI), which measures wholesale inflation, was up 0.2% in October, while year-over-year inflation rose to 2.4%. The core rate, which removes volatile food and energy prices, rose 0.3% last month, while year over year, the core rose 3.1%. This was a mixed report, with the year-over-year numbers jumping due to really low inflation data from last October; however, the data was in line with what the markets were expecting, resulting in minimal rate movement.

Last week, the Fed cut its Fed Funds rate again, this time by .25%, a move that was well-telegraphed and exactly as the markets expected. Unlike the last time the Fed cut, mortgage rates improved following Fed Chair Power’s press conference. The markets liked his acknowledgment that he sees a substantial lag in shelter inflation as well as low replacement data for inflation over the next few months, and a rise in year-over-year inflation in the near term won’t derail the Fed’s desire to get the Fed Funds rate closer to neutral. Following the press conference, expectations for a December rate were back on the table after diminishing in recent weeks.

Economic data continues to beat expectations, showing a resilient economy with minimal signs we’re heading towards a recession. This, more than anything, has caused rates to climb off their multi-year lows in recent months. The bond market, which had been pricing in both a weakening labor market and a slowing economy, has had to adjust once again and move higher after reaching the bottom of the range in September. Inflation has helped keep rates from spiking too high as progress toward the Fed’s target of 2% Core PCE inflation continues, albeit at a pace slower than many desire.

The biggest culprit for the recent rise in rates has been employment. Initial Jobless Claims have remained relatively low, showing most companies are holding on to their employees even if they aren’t hiring at the same pace they were a couple of years ago. The mass layoffs that headline the news have not made their way throughout the economy. The ADP Employment Report, which isn’t nearly as important as the BLS Jobs Report, showed 233,000 jobs created in October, which was double what the markets were expecting.  Following the ADP report was the big BLS Jobs Report showing that only 12k jobs were created in October. This was much weaker than estimates; however, the impact on rates was muted as many pointed to the Long Shoreman and Boeing strikes, as well as the hurricanes, as reasons for the low reading. Additionally, the data came out right before the election, which limited any big bets on rates moving lower, given the uncertainty around the corner.

Late last month the Fed’s favorite measure of inflation (PCE), Personal Consumption Expenditures, showed headline inflation rose just 0.2% for the month, with year-over-year inflation slowing from 2.3% to 2.1%. The core rate, which excludes volatile food and energy costs, also rose 0.3%, and annual core inflation was flat at 2.7%. While inflation hasn’t reached the Fed’s target of 2%, it continues to trend lower and could reach 2% in the first half of 2025. Shelter remains a key driver of inflation; however, both PCE and CPI calculate shelter costs on a lagging basis. Given real-time shelter readings over the past year have cooled significantly, it’s only a matter of time before the data catches up in the inflation reports.

Purchase activity has remained strong. Oddly, every year since COVID, we have seen the spring buying season push forward, with new applications remaining strong in November and December. This year, so far, is no exception as many clients are trying to beat the spring rush. Clients who choose to get a fully underwritten preapproval are seeing more success getting offers accepted on high-demand homes.

To find the lowest possible 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 best course forward.

Current Mortgage Rates This Week for WA, OR, ID, CA, and CO From Sammamish Mortgage
11/17/2024

**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) October = -0.2% – Annual = 2.6%  

Producer Price Index (PPI) October = 0.2% – Annual = 2.4%

Personal Consumption Expenditures (PCE) September = 0.2% – Annual = 2.1% 

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 2024

Loan limits have increased for 2024. Each county in every state has its loan limit. That said, the new standard conforming loan limit is $766,550, and high balance limits in select high-priced areas can go up as high as $1,149,825 for 1-unit properties in 2024.

Visit our 2024 conforming loan limit pages for Washington State, Oregon, Idaho, California,, and Colorado.

For FHA loan limits for 2024, 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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