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Inflation just fell. Will mortgage rates fall now?
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As millions of Americans wait for this inflationary cycle to cool, the Bureau of Labor Statistics on Wednesday announced a slight drop in the inflation rate for April. Down to 3.4% from March’s 3.5%, the drop was minimal but still welcome after inflation rose in the two months prior. While still significantly above the Federal Reserve’s target 2% goal, any fall is welcome news for borrowers. And it’s especially important for homebuyers looking to purchase a property.
Already dealing with the highest mortgage interest rates in decades, these buyers are looking for any relief they can get before closing on a new home. So with inflation cooling in April, then, many may be wondering if mortgage rates will soon follow the downward trend. Below, we’ll break down what to know in light of these developments.
See what mortgage rate you could get with inflation falling now.
Will mortgage rates fall now?
While a drop in inflation won’t necessarily cause mortgage interest rates to drop dramatically, it won’t hurt. However, these rates are largely influenced by the federal funds rate, which has remained stuck at a 23-year high since last summer. Since the latest inflation rate is only marginally improved, then, it’s unlikely that the Federal Reserve will lower their rate, so expect mortgage rates to remain around where they are now.
That noted, the Fed doesn’t directly dictate what lenders offer borrowers. And if lenders think the federal funds rate may soon be cut, as it could be if inflation continues to cool, they may get ahead of that by offering slightly lower interest rates to borrowers right now. But a bigger cut that’s likely to remain consistently low will only come when the Fed acts. Still, mortgage rates change daily, and if buyers look to lock in a rate today — or this week — they’ll likely be better served than if they waited for the next big financial news cycle.
Explore mortgage rates and lenders online today.
Why you should lock in a mortgage rate now
Now could be a great time to lock in a mortgage rate, if only to capitalize on the cooling inflation news. But there are other reasons to be proactive now. Here are two:
- Rates could rise again: Sure, a rate increase doesn’t appear likely right now. But the economy is dynamic and any number of factors could cause the Fed to raise rates again and mortgage rates will follow. To get to their 2% target goal, a raise may be needed, so it makes sense to lock in a mortgage rate before that possibility becomes a reality.
- You may lose your dream home: Waiting for mortgage rates to evolve in a beneficial fashion is a lost cause. No one can predict when that will happen or by how much rates will fall even if it does. In the interim, if waiting for the perfect rate, you could lose your dream home. So, if you find a home you love, buy it anyway. Rates will eventually fall again — at which point you can refinance — but the home of your dreams may never return to the market.
The bottom line
A lower inflation rate, no matter how much lower, is still better than a rising one. That noted, inflation still needs to cool significantly for homebuyers to see major relief. Instead, today’s report will likely lead to just slightly cooler rates. But that may be enough for some buyers, especially with the prospect of higher rates to come and the possibility that buyers will lose their dream home if they wait much longer.
Start exploring your mortgage rate options online now.
TRENTON, N.J. — Democratic Newark City Council President LaMonica McIver has defeated Republican small businessman Carmen Bucco in a contest in New Jersey’s 10th Congressional District that opened up because of the death of Rep. Donald Payne Jr. in April.
McIver will serve out the remainder of Payne’s term, which ends in January. She and Bucco will face a rematch on the November ballot for the full term.
McIver said in a statement Wednesday that she stands on the “shoulders of giants,” naming Payne as chief among them.
She cast ahead to the November election, saying the right to make reproductive health choices was on the ballot as well as whether the economy should benefit the wealthy or “hard working Americans.”
“I will fight because the purpose of politics and the purpose of our vote is to give the people of our communities and our nation a bold voice,” she said.
Bucco congratulated McIver on the victory in a statement but said he’s looking forward to the rematch in November.
“I am not going anywhere,” he said in an email. “We still have a second chance to make district 10 great again!”
Who are LaMonica McIver and Carmen Bucco?
McIver emerged as the Democratic candidate in a crowded field in the July special election. A member of the city council of New Jersey’s biggest city since 2018, she also worked for Montclair Public Schools as a personnel director and plans to focus on affordability, infrastructure, abortion rights and “protecting our democracy,” she told The Associated Press earlier this summer.
Bucco describes himself on his campaign website as a small-business owner influenced by his upbringing in the foster system. He lists support for law enforcement and ending corruption as top issues.
The 10th District lies in a heavily Democratic and majority-Black region of northern New Jersey. Republicans are outnumbered by more than 6 to 1.
It’s been a volatile year for Democrats in New Jersey, where the party dominates state government and the congressional delegation.
Among the developments were the conviction on federal bribery charges of U.S. Sen. Bob Menendez, who has denied the charges, and the demise of the so-called county party line — a system in which local political leaders give their preferred candidates favorable position on the primary ballot.
Democratic Rep. Andy Kim, who’s running for Menendez’s seat, and other Democrats brought a federal lawsuit challenging the practice as part of his campaign to oust Menendez, who has resigned since his conviction.
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Sean “Diddy” Combs at same Brooklyn detention center that held R. Kelly, Sam Bankman-Fried, other high-profile inmates
A second judge refused to grant bail to Sean “Diddy” Combs on Wednesday and he could remain in federal custody at a Brooklyn detention center until his trial for sex trafficking charges. Combs joins other high-profile inmates, such as singer R. Kelly, fallen cryptocurrency mogul Sam Bankman-Fried, rapper Ja Rule —even Al Sharpton served a brief stint— who were held at the same federal detention center.
Notorious for its horrible conditions —inmates won a $10 million class action settlement after enduring frigid conditions during an 8-day blackout in 2019— the waterfront industrial complex, MDC Brooklyn, houses 1,200 inmates.
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Violence and corruption have long plagued the facility; U.S. District Judge Gary R. Brown of the Eastern District of New York wrote the detention center had “dangerous, barbaric conditions” in a recent sentencing opinion. Two inmates were stabbed to death in recent months and several correction officers have been convicted for smuggling contraband and accepting bribes.
Combs joins a list of high-profile personalities that have landed at the MDC Brooklyn, partly because the city’s other federal detention center, MDC New York, closed in 2021, also due to horrible conditions. The disgraced financier Jeffrey Epstein died by suicide in his cell there in 2019. “Numerous and serious” instances of misconduct among corrections staff gave Epstein the opportunity to kill himself, a subsequent federal watchdog investigation found.
Kelly sued the federal detention center in 2022 for wrongly putting him on suicide watch after his sentencing. Kelly sought $100 million because he said the detention center knew he wasn’t suicidal after he was convicted in 2021 for racketeering and violating the Mann Act, which bars transporting people across state lines for prostitution.
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Former crypto billionaire Bankman-Fried survived on bread, water and sometimes peanut butter when he was in the MDC Brooklyn, his attorney said, because the detention center continued to serve him a “flesh diet” despite requests for vegan dishes.
Ja Rule stayed at the MDC Brooklyn for a brief time before being released after serving most of his two-year sentence for illegal gun possession. Most of his prison time was spent in a state prison in New York.
Sharpton served a 90-day sentence in 2001 and went on a hunger strike for protesting the U.S. Navy bombing of the island of Vieques, in Puerto Rico.
Combs was taken into custody on Monday and according to an indictment unsealed Tuesday he was charged with sex trafficking, racketeering conspiracy and transportation to engage in prostitution.
His attorney Marc Agnifilo told CBS News, “It’s impossible to prepare for a trial from where he is,” after a first federal judge denied Combs bail on Tuesday.
U.S. Magistrate Judge Robyn Tarnofsky agreed with prosecutors who argued the hip-hop mogul, who is accused of using his business empire as a criminal enterprise to conceal his alleged abuse of women, is a flight risk and poses an ongoing threat to the safety of the community.
Agnifilo said the part of the detention center where Combs is being held is “a very difficult place to be.”
contributed to this report.
