If you're wondering whether mortgage rates are headed down after today's inflation report, here's the short answer: yes, a little. Let me walk you through why.

Yesterday I talked about CPI, and it behaved itself. Today is PPI, the producer price index. It's what businesses pay each other before the cost ever reaches you, the consumer.

And it came in flat today, at zero, when the market expected a rise.

The Numbers Behind the Good News

Year-over-year, PPI decelerated hard, from 5.5% to 4.7%. The core, which strips out food and energy, rose two tenths against expectations of three, and its annual rate improved from 4.7 to 4.2.

Those are all moves in the right direction if you want lower rates.

One Wrinkle Worth Understanding

There's one line in the report worth flagging: the portfolio management line jumped six and a half percent.

That line tracks money-management fees, and it balloons whenever the stock market rallies. When you see stocks go up, you'll see those fees go up. Counting a stock rally as inflation is... debatable.

Even carrying that, the report came in cool. And the same quirky line feeds into the inflation measure the Fed actually watches, which lands later this month. Keep that in mind.

What Could Still Move Rates

Meanwhile, the job market stayed in its holding pattern: layoffs are low, and hiring is slow. Remember, a hot labor market usually means higher interest rates.

This afternoon we have the 30-year bond auction. If there's weak demand there, it could undo the progress we've made. And tomorrow we have retail sales.

Today's Rate Snapshot

  • 30 UMBS 5.5: 99.61 (higher is better)
  • 10 Year Treasury: 4.644 (lower is better)
  • Average rates: 6.69% (lower is better)

Rates moving even a little can change what you qualify for. If you want to see how today's numbers translate into real buying power, check out the affordability calculator. And if you'd rather just talk it through, grab a spot on my free planning session and we'll figure out where you stand.

Originally shared by u/SamTMortgageBroker in r/NewbHomebuyer — view the original thread.