For the week of January 16, 2023

Recap of last week: Rates slightly lower
Average mortgage rates improved a bit further last week, with consumer inflation data coming in that showed inflation was moving lower, as economists had forecast. Although we didn't see a big drop, the small improvement was welcome with rates much lower than the highs near the end of 2022.

Mortgage Rate Forecast: Rates likely to hold steady
This week mortgage rates are likely to be relatively unchanged, with some small day-to-day movement but not any big moves for the week. Mortgage rates are likely to hold near current levels this week and next week, ahead of the Fed meeting at the end of the month.

What's affecting rates this week:
- Economic data: Wholesale inflation data comes in on Wednesday, and economists are expecting wholesale inflation to be cooling alongside consumer inflation. Also on Wednesday the retail sales data comes out, and if it shows spending is falling would help support lower mortgage rates.
- The Fed: Current mortgage rates are based on the speculation that the Fed policy rate will peak at 4.75% by March. If markets start to believe that the Fed will raise the policy rate higher, based on strong economic data, it will pressure mortgage rates higher.