Mortgage Interest Rates Trending Higher August 22, 2022

Last week was not pleasant if you were hoping for mortgage rates to fall or at least hold steady.  After seeing rates hit a peak on July 8th, we had seen a nice trend downward the rest of July.  Mortgage Rates even fell to just under 5.0% at the end of July.  However, a slow rise in rates started in August and last week rates are now back in the mid 5.0% range.

If there’s relief in sight for rates, it will depend on economic data and inflation readings in the coming weeks.  The market and the Fed both seem to be expecting a some moderation in the inflation data, so calmer inflation won’t really help until it has established a track record with several months of substantial declines.  At the same time, the market has been surprisingly willing to be spooked by higher inflation data–as was the case this past week.

Weaker economic data has helped rates at times in the past 2 months, but weak housing data doesn’t really count because weakness is widely expected when rates have risen as much as they have.  There have also been just as many surprisingly strong economic reports–several of them contributing to the rising rate trend seen so far in August.

In the bigger picture, August’s rising rate trend is basically returning rates back to a more sideways range that we saw in May.  Incidentally, rates are now right back around the same levels they were in May, after going down lower and higher.  Without a major change for better or worse in the economic data, we can expect rates to continue bouncing around in this range until the data is looking consistently stronger or weaker.