Mortgage rate lock volume increased 6.78% in May compared with April, according to Mortgage Capital Trading Inc. (MCT), which offers mortgage capital markets technology.
As mortgage lock volume edges upward during the buying season, the mortgage industry continues to monitor economic indicators that will factor into the Federal Reserve’s decision on how long to hold rates.
Early May economic indicators present a mixed bag, which could give the Federal Reserve reason to hold rates longer, MCT says.
While April’s Consumer Price Index (CPI) aligned with predictions, the May jobs report far exceeded forecasts, with an additional 272,000 jobs.
The combination of the strong jobs report and upcoming CPI report could suggest that the Federal Reserve will hold rates longer as it seeks more consistent economic indicators pointing toward its goal of 2% inflation.
“The next couple of months will be key from a data standpoint as the Federal Reserve looks for a trend of inflation heading towards the goal of two percent,” says Andrew Rhodes, senior director and head of trading at MCT, in a statement. “Considering the nonfarm payroll number that just came out, setting a trend is going to take more time. We’re looking ahead to the May CPI print to see how the Fed is going to interpret both data points. Even with CPI coming in around expectation, the jobs number could likely push the Fed to further delay their rate cuts.”
Photo: Muhammad Zaqy Al Fattah