The rate of price inflation (median CPI) was up a tiny 0.1% last month. The CPI was down by -0.3%.
The 30-year mortgage rate is at 3.8%
There is no “inflation premium” in the mortgage rate today. This sends a signal: “Don’t worry about price inflation. Lend!” This will prove to be a misleading signal for lenders, and a bonanza for borrowers.
The price of homes could fall in a recession. But the Federal Reserve will inflate. It will not tolerate recession. So, home buyers over the next 30 years will see the nominal value of their homes rise until the FED stops inflating for fear of mass inflation. That is years away. Keynesians inflate.
To lock in 3.8% for 30 years is a give-away. Naïve lenders are handing over their money to borrowers. The FED will smash them.
Do not lend at 3.8% Borrow.
