For the week of May 17, 2021
Recap of last week: Rates slightly higher, but still low
Average mortgage rates last week were up slightly, after a weak start that saw the worst pricing midweek before recovering to end the week. As we said may happen, Wednesday's consumer inflation data did indeed pressure rates a bit, coming in even higher than expected.
Mortgage Rate Forecast: Rates will remain low
Rates this week should continue to remain low, despite renewed concerns about inflation from investors. Although we may see some movement day-to-day, rates are not in danger of moving up or likely to improve too much from here. There is a chance though that we could see rebate pricing improve. Rebate pricing is the credit you get towards closing costs from your lender, or the fee you pay to get a lower rate, often called 'points'.
What's affecting rates this week:
- Fed stimulus: The Fed continues to buy Treasuries and mortgage bonds, helping keep rates low and stable.
- Economic data: Lots of housing data this week, but it won't affect rates. Wednesday brings the minutes from last month's Fed meeting, which could get traders' attention as they look for signs for how the Fed will react to inflation.
- Bond market: Mortgage bonds could improve in pricing this week, helping rates.
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