News You'll Use

Mortgage rates were flat this week, as the market continued to look towards 2024 and future Fed rate cuts. The Fed tried to walk the market back on their rate cut expectations. Still, the market is pricing in the Fed's first rate cut in March. The market is pricing in six rate cuts next year, while the Fed was projecting only three cuts. This could be the biggest issue heading into 2024. The market is pricing in aggressive rate cuts and the Fed is not. If inflation does get down to 2%, then the Fed will need to cut rates quickly, but the question is when that will be. If inflation continues to fall quickly, then the market may be right. With inflation at 3.1% on the last CPI report, inflation still has a way to go before it hits 2%. If the data does not soften quick enough for the Fed to cut rates quickly, both bond yields and mortgage rates will move higher.

• U.S. 10-year Treasury on Thursday morning is at 3.89%

• Housing Starts came in higher than analyst's expectations (1.56 mm vs expectations of 1.36 mm)

• Building Permits came in lower than analyst's expectations (1.46 mm vs expectations of 1.465 mm)

• Existing Home Sales came in higher than analyst's expectations (3.82 mm vs expectations of 3.78 mm)

• Conference Board Consumer Confidence came in higher than analyst's expectations (110.7 vs expectations of 104.5)

• Initial Jobless Claims came in lower than analyst's expectations (205k claims vs expectations of 215k claims)

• Mortgage Applications fell 1.5% this week