For the week of August 01, 2022
Recap of last week: Rates improved
Average mortgage rates improved once again last week despite a strong inflation reading on Friday, as fears of recession outweighed fears of inflation. The Fed raised the fed funds rate .75%, but that doesn't raise mortgage rates. Mortgage rates actually improved on the news, because of the Fed's strong moves to fight inflation.
Mortgage Rate Forecast: Rates could improve further
As the week starts, it looks like mortgage rates are poised to improve further as recent economic data shows that the aggressive Fed rate hikes have started to slow the economy, which should help curb inflation. There is speculation that runaway inflation has now peaked, and we could be seeing a tipping point where rates may move lower in August than what we averaged in July.
What's affecting rates this week:
- Economic data: A quiet week for data that will have a strong impact on mortgage rates, other than Friday's jobs data. If the jobs data shows the labor market is softening, it could help rates improve. A strong showing though could be bad for mortgage rates in the short term.
- Fed speakers: As different Fed members speak this week, we could see rates react to speculation of future Fed actions.
