For the week of January 18th, 2021
Recap of last week: Rates slightly worse
Average mortgage rates remained low but were worse for the week. Rates hit their worst levels on Tuesday, before improving a bit to end the week just slightly worse.
Mortgage Rate Forecast: Rates likely to remain near current levels, possibly improve slightly
Average mortgage rates will likely stay relatively unchanged this week, but could see rebate pricing move some from day-to-day. Rebate pricing is the credit a lender provides towards closing costs based on what rate you choose, or the cost to obtain a lower rate (often called 'points'). Markets are closed on Monday in observance of MLK Jr. Day, as are most lenders.
What's affecting rates this week:
- Fed bond purchases: The Fed continues to buy Treasuries and mortgage bonds, helping to keep rates low and generally stable.
- Economic data: It is a quiet week for economic data, nothing on the calendar that should cause any shakeup with rates.
- Bond pricing: Lenders set mortgage rates based on the pricing of mortgage bonds, which have been performing poorly over the past two weeks (causing rates to rise). However, mortgage bonds did show signs of improving last week, although we aren't likely to see rates improve too much this week.
