For the week of December 19, 2022

Recap of last week: Rates slightly improved
Last week's inflation data came in narrowly better than expected, and although above the Fed's target 2% rate was tied for lowest since November 2021. And while the Fed raised policy rates 0.5% and gave a message that it projected to raise rates in 2023 higher than markets expected, markets don't believe the Fed will be able to do that due to a slowing economy and decreasing inflation. All of this helped mortgage rates end the week slightly better than the previous week.

Mortgage Rate Forecast: Rates could be choppy
Average mortgage rates may creep up a bit this week, but aren't in danger of moving significantly higher from here. Traders tend to take off the last couple of weeks of the year, which leads to lower trading volumes and can make mortgage rates a bit choppy from day to day. We could end the week with rates slightly higher though, after ending last week near the best levels we've seen in months.

What's affecting rates this week:
- Economic data: Consumer sentiment and the PCE inflation report come out on Friday, and could cause more movement than normal due to the holiday.
- Christmas: The bond market will close early Friday (2pm ET) and be closed on Monday in observance of Christmas.