March 14, 2026
|
Most of the movement in mortgage rates this week was due to changes in oil prices, which continued to climb. Two major inflation reports matched expectations and caused little reaction. As a result, mortgage rates ended the week higher.
|
|
The Consumer Price Index (CPI) is one of the most closely watched inflation indicators released each month. To reduce short-term volatility and get a better sense of the underlying inflation trend, investors look at core CPI, which excludes food and energy. In February, Core CPI was 2.5% higher than a year ago, matching expectations and remaining at the lowest level since 2021.
|
|
|
Shelter (housing) costs were up 3.0% on an annual basis and continue to be a primary reason why progress in bringing down inflation remains challenging, but this reading has been trending lower in recent months. Within this component, rent rose just 0.1% from January, the smallest monthly increase since January 2021.
|
|
Fed officials keep a close eye on inflation, and the PCE price index is their favored indicator. One of the significant differences with CPI is that PCE places more weight on health care costs and less on shelter. Delayed by the government shutdown, the latest report revealed that Core PCE in January was 3.1% higher than a year ago, up from an annual rate of increase of 3.0% in December and matching the consensus forecast. This was the highest reading since March 2024. Progress toward the 2.0% target of the Fed has not been easy, and this desired level has not been achieved since February 2021.
|
|
In February, sales of existing homes rose 2% from January, exceeding expectations, but still were down slightly from a year ago. The median price of $398,000 was up just a slim 0.3% from last year at this time. Inventories remain stuck at low levels, standing at just a 3.8-month supply nationally, well below the roughly 6-month supply typical in a balanced market. However, inventories were 5% higher than a year ago.
|
|
Looking ahead, attention will remain fixed on the conflict with Iran. Investors also will monitor comments from government officials about tariffs. The next Fed meeting will take place on Wednesday, and no change in the federal funds rate is expected. Investors will be looking for guidance about the impact of higher oil prices on future monetary policy. For economic data, the Producer Price Index (PPI), a monthly inflation indicator, will be released on Wednesday.
|
|
|
Weekly Change
|
|
10yr Treasury
|
rose
|
0.10
|
|
Dow
|
fell
|
700
|
|
NASDAQ
|
fell
|
50
|
|
|
|
Calendar
|
|
Wed
|
3/18
|
Fed Meeting
|
|
Wed
|
3/18
|
PPI
|
|
Thu
|
3/19
|
New Home Sales
|
|
|
Ress No. 1, LTD (by DBA MBSQuoteline)
