Why today’s data matters

New inflation and growth reports gave borrowers a little relief today. The government’s inflation update rose less than the consensus forecast, with overall prices up 0.4% instead of 0.5% and the stripped-down reading up 0.2% instead of 0.3%. Economic growth for the first part of the year was also revised lower to 1.6% from 2.0%, and a business spending measure fell 1.1%, showing softer demand under the surface. That mix cooled some concern about stubborn inflation, pulled government bond interest rates a bit lower, and helped mortgage pricing improve slightly. Mortgage News Daily's same-day national rate index put the 30-year fixed national average at 6.59%, down 0.02%, which is a nationwide average and not a lender quote or APR.

Today's Mortgage Rate Averages

Product	Rate	Daily
30-Yr Fixed	6.59%	▼ -0.02%
15-Yr Fixed	6.11%	▼ -0.01%
FHA	6.12%	▼ -0.05%
Jumbo	6.70%	▼ -0.03%
7/6 ARM	6.07%	▼ -0.05%
VA	6.14%	▼ -0.05%

Source: Mortgage News Daily National Rate Index · Updated today

These figures are nationwide averages from Mortgage News Daily, not a quote, offer, or advertised rate or APR from Homeseed Lending Team.

The biggest surprises in the reports

The latest inflation report came in lighter than the consensus forecast. Overall monthly inflation rose 0.4%, below the expected 0.5%.
A closely watched underlying inflation reading increased 0.2% for the month, under the 0.3% forecast. The yearly readings were in line, with overall inflation at 3.8% and the underlying measure at 3.3%.
The second look at early-year economic growth was cut to 1.6% from 2.0%. That points to slower momentum than first reported.
A key business investment reading dropped 1.1% in April. The headline durable goods number jumped only because of large aircraft bookings.

Lower-than-forecast inflation and softer growth data gave markets a reason to expect less pressure on borrowing costs.

How that filtered into mortgage rates

When inflation and growth cool, investors often expect less pressure for tighter Fed policy. That can bring government bond interest rates down and help mortgage pricing.
Market data showed government bond interest rates moved about 0.02% lower by midday after the inflation report, even with oil prices rising on renewed overseas conflict.
Mortgage News Daily's same-day national rate index showed the 30-year fixed national average at 6.59%, down 0.02%. These are nationwide averages from Mortgage News Daily, not quotes or advertised rates from Homeseed Lending Team.
New jobless claims rose to 215,000, up 5,000 from the prior week. Continuing claims reached 1.79 million, but both levels still point to a labor market that remains fairly firm.

The market reaction was modest, but softer inflation and slower growth were enough to improve same-day mortgage averages a little.

What to keep an eye on next

Another mild inflation reading would help this recent improvement hold. A hotter report could quickly reverse it.
More signs of slower business demand could keep some downward pressure on rates. A rebound in spending could change that tone.
Oil prices still matter because new conflict can lift fuel costs and revive inflation worries fast.
If you are comparing loan options, remember that same-day national averages can differ from the quote you get from a wholesale lender based on credit, loan size, and loan type.

Borrowers should watch inflation first, then growth and oil, because all three can change mortgage pricing in a hurry.

Final Takeaway

Get a personalized mortgage strategy review from the Homeseed Lending Team. As your mortgage broker, we'll compare options across wholesale lenders, talk through lock versus float timing, and help you decide what fits your payment and timeline.

Homeseed Lending Team, powered by Barrett Financial Group, L.L.C., NMLS #181106. Licensed in AZ, CA, FL, NV, OR, TX, WA. Equal Housing Lender. This article is for informational purposes only and does not constitute an offer to extend credit.