Mortgage Rate Update: Inflation and Fed Hike Push Rates Higher
What Did Rates Do This Week?
Mortgage rates moved slightly higher this week following hotter-than-expected inflation data and the Federal Reserve’s decision to raise its benchmark interest rate.
Higher inflation can put upward pressure on mortgage rates by pushing bond yields higher. While the Fed’s rate hike grabbed headlines, mortgage rates does not directly follow the Federal Funds Rate. Instead, they respond to inflation expectations, economic data, and bond market activity.
What to Look Forward to Next Week
Next week, investors will continue watching inflation trends, economic reports, and Federal Reserve commentary for clues about the direction of mortgage rates.
If inflation shows signs of cooling, rates could find some relief. However, stronger economic data or continued inflation concerns could keep rates under pressure. Markets may remain sensitive to new developments.
Lock or Float Bias
Current Lock/Float Bias: Slight Lock
With mortgage rates moving higher and inflation remaining a concern, buyers closing soon may want to consider locking to protect against further increases.
Those with longer timelines may have more flexibility to float, but should be prepared for continued market volatility. The right strategy depends on each buyer’s closing timeline and comfort with risk.
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