What's Ahead For Mortgage Rates This Week - February 13, 2023Last week’s economic reporting included coverage of Federal Reserve Chair Jerome Powell’s speech to the Economic Club of Washington and the University of Michigan’s data on consumer sentiment. Weekly readings on mortgage rates and jobless claims were also published.

 

Federal Reserve: Chairman Jerome Powell Says the “Disinflationary Process” is Ongoing


Fed Chair Jerome Powell said in remarks made to the Economic Club of Washington that the “disinflationary process” has started, but he also indicated that January’s unexpectedly strong jobs report indicated that further interest rate hikes are necessary: “We think we need to do further rate increases and we think we’ll need to hold policy at a restrictive level for a period of time.” 

 

Several other senior Fed officials said that further interest rate hikes would be required to keep inflation in check; as 517,000 jobs were added last week after analysts predicted declining job growth as compared to the expected reading of 187,000 jobs added. The national unemployment rate fell to a 54-year low of 3.4 percent.

 

Analysts cautioned that the Fed would likely continue to raise rates to control inflation but Chairman Powell said that the Fed would likely raise rates only “a couple more times.”

 

Mortgage Rates, Jobless Claims Rise


Freddie Mac reported higher mortgage rates last week; the average rate for 30-year fixed-rate mortgages was three basis points higher at 6.12 percent. The average rate for 15-year fixed-rate mortgages rose by 11 basis points to 5.25 percent. 

 

Jobless claims also rose last week with 196,000 new claims filed as compared to the previous week’s reading of 183,000 initial claims filed. 1.69 million continuing jobless claims were filed as compared to the prior week’s reading of 1.65 million ongoing claims.

 

The University of Michigan reported that its initial consumer sentiment reading for February rose to an index reading of 66.4 as compared to the expected reading of 65.1 and last month’s index reading of 64.9. Consumer sentiment readings over 50 indicate most survey respondents were positive about current economic conditions. 

 

The University also released monthly readings on year-over-year inflationary predictions. February’s early reading predicts 4.2 percent year-over-year inflation as compared to January’s reading of 3.9 percent year-over-year inflation.
 


What’s Ahead


This week’s scheduled economic reports include readings on home prices, inflation, retail sales, and data on building permits issued and housing starts. Weekly readings on mortgage rates and jobless claims will also be released.

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