Wednesday, 20 of June of 2018

Economics. Explained.  

Mortgage Rate

May 8, 2018

Right after the election in November of last year mortgage rates  jumped quickly from 3.5% to 4.2% as market participants believed that President Trump’s proposed individual and corporate income tax cuts.  repatriation of corporate earnings currently locked overseas, and significant relief from the currently onerous regulatory burden, would boost GDP growth significantly, boost inflation, and push long-term interest rates higher.  Strong data early this year coupled with a gradual increase in inflation has boosted the 30-year mortgage rate to 4.5%

If the Fed raises rates two more times in 2018 to 2.1% and the core inflation rate climbs from 1.7% today to 2.4% by yearend, the 30-year mortgage rate is probably going to end 2018 at about 4.7%.

Stephen Slifer


Charleston, SC

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