Inflation remains the “number one” data point to watch, according to Sonoran Lending president and senior loan officer Jay Lessard (pictured top), while fiscal policy and government borrowing, geopolitical risk, tariffs and energy prices all remain on his radar.
Those can have a significant impact on the direction of bond yields – which, although influenced in part by Federal Reserve decisions, have more of a say on mortgage rates than central bank decisions do.
That’s a consideration Lessard is constantly underlining to customers. “The important point for consumers is that mortgage rates aren’t determined by one Fed meeting,” he told Mortgage Professional America. “They’re being influenced every day by what investors believe inflation, economic growth, and Fed policy are going to look like six or 12 months from now.”
‘The path to lower mortgage rates isn’t going to be a straight line’
Despite the continuing economic storm clouds, Lessard said his overall outlook is cautiously optimistic over the longer term – but his near-term view has become more guarded, influenced mainly by the dramatic runup in rates seen in recent weeks.
