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Last updated on May 16th, 2022 at 08:39 am
It is getting continuously difficult to predict mortgage rates. Depending on market sentiment, headlines, and other economic indicators they rise and fall.
What could move markets this week?
On Friday, the big economic news where the jobs report for April will be released by U.S. Labor Department.
During the initial period of the coronavirus, pandemic unemployment rose, but as the economy reopens, the U.S. job market has recovered back strongly.
The easiest way to understand mortgage rates calculations is: The 30-year fixed-rate mortgage closely follows the 10-year Treasury yield, so when that rate goes up, the 30-year fixed-rate mortgage will follow suit.
Fixed mortgage rates are influenced by other factors, like supply and demand.
When there is too much business, the mortgage lenders will raise rates to decrease demand.
And when the business is tight, they will lower rates to attract more customers.
The investors who buy your loan set your final rates. Most mortgages are packaged as securities and resold to investors.
So the interest rate offered by your lender is the rate the investors on the secondary market are willing to pay.
The Labor Department will release the consumer price index for April on May 12. Another factor that figures into mortgage rates is price inflation.
When inflation is low, rates move lower. When inflation picks up, so will the fixed mortgage rates.
Reference Source: Bankrate
