For the week of June 14, 2021
Recap of last week: Rates improved
Average mortgage rates improved slightly last week, despite data showing hotter than forecast inflation. Normally inflation can put pressure on rates, but investors and economists believe that the current round of inflation is transitory and caused by supply chain shortages and increased demand as the economy continues to recover.
Mortgage Rate Forecast: Rates will remain low, could improve
Average mortgage rates this week will remain low, and could even improve if nothing surprising comes from this week's Fed meeting. Although investors were concerned a few weeks ago that the Fed may start talks this month about reducing bond purchases, many economists and investors now believe that talk about tapering will be put off till August or later.
What's affecting rates this week:
- Fed stimulus: The Fed continues to buy Treasuries and mortgage bonds, helping keep mortgage rates low. Concerns about the Fed reducing bond purchases have been pushed back.
- Economic data: This week's economic data is not likely to have much effect on rates.
- Fed meeting: The Fed meeting concludes on Wednesday with a policy statement and Fed Chair Jerome Powell's press conference. We could see a reaction that could effect rates.
