📉 Inflation Eases: Mortgage Rates Dip on Positive CPI News
This week, the market saw a glimmer of relief: inflation numbers came in lower than expected—and that’s good news for buyers, sellers, and anyone keeping an eye on mortgage rates.
Yes, there were headlines about tariffs and conflict overseas. But despite that noise, the real market-mover was inflation data.
Here’s the breakdown:
🔹 CPI (Consumer Price Index) showed core inflation rose just 0.1% from April to May—well below the expected 0.3%. Year-over-year, that’s a 2.8% increase, marking the lowest annual rate since March 2021.
🔹 PPI (Producer Price Index) also came in cooler than expected—up only 0.1% in May.
🔹 Shelter costs (aka housing) are still keeping inflation a bit sticky. But other categories like used and new cars, plus clothing, saw price drops.
What does this mean for the market?
Rates edged slightly lower by the end of the week. While we’re not back to early 2021 levels yet, this is a step in the right direction. Lower inflation typically eases pressure on the Fed—and when the Fed isn’t fighting inflation aggressively, mortgage rates tend to follow suit.
What’s next?
Investors are watching whether new tariffs could nudge inflation back up—and whether geopolitical tensions will impact oil prices. For now, though, the market is digesting this week’s good news.
🏡 Real Estate Takeaway
If you’re on the fence about entering the market, now’s a great time to stay engaged. As inflation eases and rates respond, your buying or selling power could shift quickly.
Want to talk strategy? Let’s connect.
