For the week of September 26, 2022
Recap of last week: Rates got worse
Average mortgage rates continued to move higher last week on growing fears that inflation is not slowing down enough and the Fed is going to hike policy rates more aggressively through the end of the year and into 2023.
Mortgage Rate Forecast: Rates likely to worsen
Mortgage rates are likely to continue higher this week as markets reset. Traders are sitting on cash, trying to survive the Fed induced storm that is battering stocks and bonds. Rising yields and falling bond prices contribute to higher mortgage rates. Many borrowers are seeing situations where they must pay points to even get a mortgage, and this is because of secondary market conditions and not generally within the control of the mortgage lender right now.
What's affecting rates this week:
- The Fed: It is now expected the Fed will hike rates higher and hold them there longer.
- Economic data: Tuesday's consumer confidence reading and Friday's PCE inflation report are most likely to affect rates this week.
- Global economy: Fiscal stimulus and tax cuts in Europe have fueled fears of even more inflation overseas, requiring central banks to raise rates more aggressively. The reaction overseas also affects mortgage rates here at home.
