Inflation Is Up – So Why Aren’t Mortgage Rates?
Investors fear inflation and mortgage rates usually rise. But investors appear to believe the Fed when it says the U.S.’s current bout of inflation is only temporary.
NEW YORK – The 30-year fixed-rate mortgage averaged 2.96% for the week ending June 10, according to Freddie Mac’s weekly report – down three basis points from the previous week.
The 15-year fixed-rate mortgage fell four basis points to an average of 2.23%. The five-year Treasury-indexed adjustable-rate mortgage averaged 2.55%, down nine basis points from the prior week.
Mortgage rates usually move roughly in tandem with long-term bond yields, including the 10-year Treasury, and the past week was not an exception. However, it’s not common to see inflation rising without stocks falling at the same time.
“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,” says Realtor.com chief economist Danielle Hale. “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.”
Source: MarketWatch (06/10/21) Passy, Jacob
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