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- 💸 Inflation Stats Fuel Bond Rally
💸 Inflation Stats Fuel Bond Rally
Mortgage Rates Rebound ⬇️. Poll results from last week and enjoying the long weekend.
Glenn Groves
January 21, 2025
In partnership with
Issue 104 - Good Morning and Happy Tuesday.
Those Mondays off really seem to compact the rest of the week, don’t they? And now you know why GTG Weekly is out later than the normal 10am PST launch on Tuesdays lol.
We saw a great reversal last week with bonds. This was a result of lower-than-expected inflation numbers that were released on the 15th. We welcomed the rally with open arms!
Personal note: The long weekend saw us enjoying more rockets at the High School field, enjoying some NFL playoff football, and getting outside when the sun was out!
TLDR (Too Long Didn’t Read) Summary
⬇️ RATES - Last week we took an L, but now we bounced back.
📊 INDUSTRY - Cooling inflation leads to bond rally.
Will the LA fires affect homeowners insurance premiums statewide?
100% of the Poll from last week said - YES
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INTEREST RATES
Rates 📢 January 21st, 2025
10 year 3-Month Snapshot
Product | Rate / APR | Weekly Change |
|---|---|---|
⬇️ Conv. | 7.000% / 7.030% | -.250% |
⬇️ Conv. HB | 7.250% / 7.279% | -.125% |
⬇️ JUMBO | 6.750% / 6.773% | -.125% |
⬇️ FHA 3.5% DP | 6.125% / 7.073% | -.250% |
⬆️ VA 0% DP | 6.250% / 6.482% | -.375% |
Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity. www.nmlsconsumeraccess.org
Rates: Rates make a complete reversal from last week.
Bottom Line: I'm hoping that this is just the start of the 10-year breaks below a critical threshold.
TECHNICALS
Inflation Cools, Bonds Rally
December’s Consumer Price Index (CPI) rose 0.4%, with the annual rate at 2.9%.
Core CPI (excluding food and energy) increased by just 0.2%, lowering the annual Core rate to 3.2%.
Lower shelter costs (46% of Core CPI) are helping inflation trend toward the Fed’s 2% target.
The Producer Price Index (PPI) also came in cooler than expected, rising 0.2%, suggesting slower inflation ahead.
Why It Matters: Slowing inflation could ease pressure on mortgage rates, creating opportunities for buyers.
🏠 Housing Market Update
Home Builder Confidence rose slightly to 47, the highest since April, though still below the breakeven level of 50.
December saw a 15.8% surge in new construction, led by a 62% jump in multifamily starts, with single-family starts showing modest growth.
Housing Supply Imbalance: Household formations are at 1.9 million annually, but housing starts lag at 1.5 million, keeping demand strong.
Why It Matters: Limited supply continues to support home values, while stabilizing rates may boost buyer confidence.
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