Mortgage Rate Update: Oil Prices and Fed Minutes Put Pressure on Rates

What Did Rates Do This Week?

Mortgage rates moved higher this week, with most major loan programs increasing by about 0.125%. The 7-year jumbo ARM remained unchanged.

Several factors influenced the mortgage market. Housing Starts and Building Permits provided insight into future housing supply, while Pending Home Sales offered a look at buyer demand. The release of the FOMC Minutes also gave investors more insight into the Federal Reserve’s outlook for interest rates.

Oil prices remained another key factor. Higher oil prices can increase inflation concerns, which can put upward pressure on mortgage rates. Together, these factors kept rates under some pressure this week.

What to Look Forward to Next Week

Next week, markets will continue watching economic data and inflation expectations for clues about the direction of mortgage rates. Investors will also keep an eye on oil prices and any new developments that could affect inflation. Continued movement in either direction could impact the bond market and mortgage rates.

Lock or Float Bias

Current Lock/Float Bias: Slight Lock

With mortgage rates moving higher this week and inflation concerns still tied to oil prices, borrowers closing soon may want to consider locking their rate. Those with more time before closing may choose to float in hopes of improvement, but should be prepared for continued volatility as markets react to economic data and oil prices.