For the Week Ending May 12, 2017 Please enjoy this quick update on what happened last week in the housing and financial markets. Inflation at the wholesale level, before it reaches the consumer, rose 0.5% in April and is up 2.5% for the last 12 months. Inflation pressures rates to go higher. The Fed is expected to raise policy rates at their June FOMC meeting. Raising rates will help keep rising inflation in check at the Fed’s target of 2%. There’s speculation that the Fed may also raise policy rates again in September. Mortgage rates may be pressured higher now as traders prepare for the hike. Fannie Mae’s Home Purchase Sentiment Index rose 2.2% in April. Five of six components that measure confidence in buying were up for the month. Forty-nine percent of those that don’t yet own a home expect to purchase in the next 5 years. Ten percent say they plan to buy as soon as the next year. Mortgage applications were up last week, with home buyers fueling the increase. Total applications for loans rose 2.4%, showing strong demand continues. Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.