The 30-year fixed-rate and 5/1 adjustable-rate mortgages each rose two basis points, while the 15-year fixed-rate was unchanged, according to a NerdWallet survey of daily mortgage rates published by national lenders Thursday morning.
The big news of the day so far is the Consumer Price Index, a broad measurement of inflation. According to the Bureau of Labor Statistics, overall prices shot up 1.9% in August compared with a year earlier. That’s a faster pace than the 1.7% year-over-year inflation rate in July.
The Federal Reserve’s inflation target is 2%, and with the August CPI reading of 1.9%, the economy has crept closer to that goal. Much of the August increase was a result of higher prices for gasoline and shelter, according to the Bureau of Labor Statistics: Gasoline rose 6.3% in August, and a broad measure of housing costs went up 0.5%.
The category of “wireless telephone services” fell 0.1% in August, which was less of a decrease than had been seen in previous months. Fed Chair Janet Yellen has said that price competition among cellular service providers has been one factor in keeping the inflation rate low. This report led economist Diane Swonk to tweet that a Fed rate hike in December “is a go,” because the CPI data shore up Yellen’s claim that some of the weakness in inflation is transitory.
Fall in wireless cell phone rates abated, shoring up Yellen's claim some of weakness is #CPI was transitory; rate hike in Dec is a go.
— Diane Swonk (@DianeSwonk) September 14, 2017
The odds of a December Fed rate increase went up, according to the CME Group’s FedWatch. On Thursday morning, futures traders had priced in a 50.9% chance of a rate increase in December. On Tuesday, the odds had been 41.3%.
It’s too soon to know how it will affect mortgage rates if investors become increasingly convinced that the central bank will raise short-term rates in December. It’s possible that mortgage rates could rise in anticipation of a Fed rate hike. It’s also possible that mortgage rates could fall if investors fear that a rate increase would prematurely slow the economy.
In terms of the Fed meeting next Tuesday and Wednesday, the CME Group says there’s almost a 100% chance rates will stay the same.
MORTGAGE RATES TODAY, THURSDAY, SEPT. 14:
NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.
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