In 431 B.C. Athenian general Pericles delivered a speech praising the sacrifice of soldiers who perished in the Peloponnesian War. This is the first known event in which those who have paid the ultimate price for the benefit of others were honored publicly. In 1971 the US Federal Government made “Decoration Day” a federal holiday known as “Memorial Day”.
The holiday shortened week is condensing the release of significant economic data.
Earlier today the S&P CoreLogic Case-Shiller Home Price index was released and showed that home prices in Portland increased by 9.2% from last year. The only market which outpaced Portland was Seattle where prices increased by 12.3%.
As I’ve commented many a time inflation if the ultimate driver of mortgage rates. The Fed’s favorite gauge of inflation, known as the “Personal Consumption Expenditure” price index (PCE), was released today and showed inflationary pressure decreased last month. The core inflation measurement was up 1.5% from last year which is well below the Fed’s target of 2%.
Even so the Fed is likely to hike short-term interest rates when they meet next month. But don’t fret, the Fed does not directly control mortgage rates so this action should not negatively impact mortgage rates in the near-term. The Wall Street Journal reported today that the Fed plans to release an outline for how it plans to unwind the $4.5 trillion of bonds on its balance sheet at this meeting. An accelerated plan to sell these assets would hurt mortgage rates and vice versa.
Later this week we’ll see Pending Home Sales (Wednesday), jobless claims (Thursday), and the all-important jobs report (Friday). Analysts are expecting ~175,000 new jobs created for the month of May.
From a technical perspective mortgage rates remain near multi-month lows. I would recommend locking while they remain this low.
Current Outlook: locking