For the week of February 1st, 2021
Recap of last week: Rates basically unchanged
Average mortgage rates improved slightly midweek before losing ground to end the week basically unchanged. The improvements were small, mainly improving rebate pricing rather than actually improving rates. Rates remain near record lows.
Mortgage Rate Forecast: Rates will remain low, could end the week slightly worse
Average mortgage rates will remain low, but may end the week at least slightly worse depending on how markets perform this week. We may also see some small day-to-day movements in rebate pricing, 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').
What's affecting rates this week:
- Economic data: Not much to worry about this week, but Friday's jobs data could cause some small movement for rates and pricing.
- Fed bond purchases: The Fed continues to buy Treasuries and mortgage bonds, helping to keep rates low and generally stable.
- Bond pricing: Lenders set mortgage rates based on the pricing of mortgage bonds, which face technical resistance in improving further. This points to the possibility of rates getting slightly worse, while unlikely to improve much from here.
