Optimism surrounding the “Great Reopening” across the U.S. is taking place with most states now at almost full capacity for all types of venues. You can feel the energy and see the pent-up demand across the nation as COVID cases decline and as the virus loses its grip.
During the shutdowns, suppliers decreased production. So, what happens when you have too many dollars that may be chasing limited products? Inflation tends to increase. However the limited product obstacle will most likely give way to a ramp-up in supply as most businesses are back at full capacity and will begin to deliver more and more products.
Consumer spending makes up two-thirds of our gross domestic product, and Americans are looking to spend big this summer. Estimates are now calling for 6%+ gross domestic product growth in 2021. Fed Chair Jerome Powell continues to assert that any rise in inflation will be transitory and that prices will level off in the second half of this year.
In this current higher inflation environment, mortgage rates would typically increase, but the 30-year fixed-rate mortgage has declined from the beginning of April to the latest reading at the end of May.
Bottom line: Despite the recent increase in inflation, mortgage rates remain just above all-time lows thanks to the Federal Reserve’s bond-buying program. Now is a great time to capture the best rates in three months before they tick up over time as the economic recovery continues.
Source: Mortgage Market Guide
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.
