The economy of the United States is driven by jobs and housing. One might think, given recent attention on the inflation rate, that prices drive the economy, but that is not the case. Orion’s brokers are occasionally asked about mortgage rates heading back down into the 3’s and will tell their clients that it is highly unlikely.

Earlier this month the nonfarm payrolls report last week for March blew past expectations, with the economy adding over 300k jobs, the unemployment rate ticking down, and the labor force participation rate inching up. There are no signs of recession in the labor market. As has been the case for many months now, the employment sector is doing very well, and brokers will tell clients that a strong economy usually leads to higher rates.

Last week we saw yet another hotter-than-anticipated consumer price index (CPI) report. Any earlier predictions by “experts” of many rate cuts by the Federal Reserve nearly evaporated, at least before summer. Yes, investors reacted to the CPI data by dialing back their Federal Reserve rate cut expectations and reducing the odds of a 25-basis point cut in June dramatically.

So far this month we’ve seen jobs and inflation data. But it is a new week, and investors will be focusing on the March retail sales report, U.S. industrial production, and housing starts & building permits and existing home sales data. But we’re telling our clients, “Don’t look for any dramatic surprises that will help rates toward the downside.” The U.S. economy, and the consumer, continues to motor along, despite higher rates from a few years ago. Interest rates seem to be in a neutral range, neither inclined to go up much or down much, and mortgage rates seem to be in the same situation. The bad news is that there is little reason for mortgage rates to drop much; the good news is that there is little reason for them to go up much either.

And for further good news, Orion offers some very good mortgage products that are not as susceptible to interest rates as those of our competitors. As your Orion AE about solutions!