Mortgage rates are notoriously difficult to predict. They rise and fall based on market sentiment, securities and various economic indicators. Here’s a look at what could move the markets this week.
The Federal Reserve’s Open Markets Committee has a two-day meeting scheduled for Tuesday and Wednesday, and Fed Chairman Jerome Powell will make remarks to the media on Wednesday. No one expects the Fed to hike rates, but market watchers will listen carefully to Powell’s comments on inflation and economic growth.
The Fed does not set mortgage rates directly, but rates are influenced by the general interest rate climate.
On Thursday, the United States Bureau of Economic analysis will release its estimate of the first quarter gross domestic product.
Mortgage rates are complicated, but the 30-year fixed rate mortgage closely tracks the yield of the 10-year Treasury. The 10-year started last week at 1.59 percent and edged down to 1.54 percent by the end of the week.
Ultimately, the rates are set by the investors who buy your loan.
Most US mortgages are packaged in the form of securities and resold to investors. Your lender offers you an interest rate that secondary market investors are willing to pay.
On the horizon
Next week, big economic news arrives on May 7, when the US Department of Labor releases its employment report for April.