02/17/2026
Quick Public Service Announcement regarding CPI and what it means to You as a consumer.
Lately lots of people have been asking me about the rate roller coaster we are on and how best to position themselves in a Purchase situation. My advice is a Strong offer with a TRULY Pre- approved Application will win the deal. Unless of course you are doing a Cash deal which will win almost all of the time.
At this point rates continue trending in the lower range. As Comerica Bank’s E Newsletter from their economic team put it - "CPI inflation likely slowed in January, but the improvement should be read with a grain of salt: The 2025 government shutdown interrupted collection of some price surveys, making CPI look unrealistically low now. The CPI will likely move a notch higher in April when the government’s statisticians fill the gaps in the data."
To elaborate on the CPI and the WHY :
Rising Consumer Price Index (CPI) reports generally cause mortgage rates to increase, while falling CPI indicates lower inflation, often leading to lower mortgage rates. High inflation erodes bond returns, prompting investors to demand higher yields, which boosts mortgage rates. Conversely, cooling inflation signals the Federal Reserve may slow rate hikes, allowing mortgage rates to ease.
To clarify Further:
Rising CPI (Higher Inflation): As inflation climbs, lenders fear reduced purchasing power and raise mortgage rates to compensate. This often leads to the Federal Reserve raising the federal funds rate to "cool off" the economy, which drives up borrowing costs, including mortgages.
Falling CPI (Lower Inflation/Deflation): When inflation cools, the pressure on bond yields decreases, allowing mortgage rates to stabilize or decline.
Key Drivers: Mortgage rates are influenced by the bond market, particularly mortgage-backed securities, which react to future inflation expectations.
Impact: A rising CPI typically makes home loans more expensive, reducing homebuyer demand.
While inflation does not dictate mortgage rates directly, it dictates the economic environment in which they are set.
That said, there's not a lot of data to look at until Thursday when we get Initial Jobless Claims and Friday when we get GDP, PCE, new home sales, and consumer sentiment.
So, all of this means we could be finally off the rollercoaster. If we are, it’s not likely to last a long time so take advantage and make sure you get your loan Locked if you didn't from the start of your transaction.
IF YOU ARE IN A TRANSACTION THAT HAS YOU NOT WHERE YOU WANT TO BE ( RATE, TERMS, ETC.) CALL ME SO MY TEAM AND I CAN TIGHTEN YOU UP.
Sean Laidler
Xpert Home Lending
(253) 921-4699
NMLS #34468
xperthomelending.com
[email protected]
1100 Satellite BLVD NW, Suwanee, GA 30024
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