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Mortgage rates fell over the past week, despite inflation hitting a 13-year high. What’s going on?

‘The fact that rate movements don’t appear to be tied to any specific data or developments makes it difficult to chart their path forward’

Americans continue to enjoy historically low interest rates on home loans, even as inflation is rising to levels not seen in over a decade.

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Benchmark mortgage rates slid over the past week, without any clear reason for a decline, continuing the reprieve for price-sensitive home buyers.

The 30-year fixed-rate mortgage averaged 2.96% for the week ending June 10, down three basis points from the previous week, Freddie Mac FMCC, +1.80% reported.

The 15-year fixed-rate mortgage fell four basis points to an average of 2.23%. The 5-year Treasury-indexed adjustable-rate mortgage averaged 2.55%, down nine basis points from the prior week.

Generally speaking, mortgage rates move roughly in tandem with long-term bond yields, including the 10-year Treasury TMUBMUSD10Y, 1.438%, and this past week was not an exception.

“The Freddie Mac fixed rate for a 30-year loan dropped along with the 10-year Treasury yield this week, as investors seem to accept the Federal Reserve’s view that the current inflation is temporary and a patient monetary response continues to be warranted,” said Danielle Hale, chief economist at Realtor.com.

(Realtor.com is operated by News Corp NWSA, -1.45% subsidiary Move Inc., and eLesor is a unit of Dow Jones, which is also a division of News Corp.)

This week’s mortgage rates report could also be a reflection of the monthly jobs data released last Friday, because May’s employment figures came in below expectations.

Other economists, though, argued that the movement in interest rates wasn’t so logical. “The downward shift in rates, and the bond yields that influence them, has been perplexing for markets as there was not an obvious reason for such a move to occur,” said Matthew Speakman, an economist with Zillow Z, +2.86% ZG, +3.81%. He argued that the May employment figures ought to have “merely prevented a sharp upward move in rates, rather than stoking a meaningful downturn.”

The movement in interest rates could also reflect foreign buying of U.S. Treasurys, which would put downward pressure on rates. Either way, interest rates have yet to show significant increase in keeping with the rate of inflation seen throughout the economy, which reached a 13-year high, according to the latest numbers from the consumer price index. That new data could put some upward pressure on rates.

“The fact that rate movements don’t appear to be tied to any specific data or developments makes it difficult to chart their path forward in the near term,” Speakman said.

Mortgage lenders, meanwhile, are growing more pessimistic about the market’s outlook. A new survey from Fannie Mae FNMA, +2.26% found that 69% of lenders expect their profit margins to decrease in the next three months, which is a record.

Mortgage applications have fallen, in part because of a decline in refinancing activity as rates have risen from their record lows. But there’s also evidence that demand for loans to purchase homes has fallen, which could show that buyers are being worn down by the competitive market.

“Housing bubble and crash worries are common, even showing up in a record-low share of people saying it’s a good time to buy a home,” Hale said.

See also: Most Americans think it’s a bad time to buy a home — but there’s one reason they’re still willing to take the plunge

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