The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
Inflation is still running hot, and mortgage rates are unusually volatile. Here’s a look at what could move markets this week.
On Wednesday, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announces new residential sales statistics for October. Also Wednesday, the University of Michigan releases its latest consumer confidence index. The reports don’t drive mortgage rates by themselves, but the data does give new insight into the cooling housing market.
As always, mortgage rates and yields on 10-year government bonds are joined at the hip. Mortgage rates rise and fall based on market sentiment, headlines and a variety of economic indicators. The math behind rates is complicated, but here’s one easy rule of thumb: The 30-year fixed-rate mortgage closely tracks the 10-year Treasury yield. When that rate goes up, the popular 30-year fixed-rate mortgage tends to do the same.
Rates for fixed mortgages are also influenced by other factors, such as supply and demand. When mortgage lenders have too much business, they raise rates to decrease demand. When business is light, they tend to cut rates to attract more customers.
Ultimately, rates are set by the investors who buy your loan. Most U.S. mortgages are packaged as securities and resold to investors. Your lender offers you an interest rate that investors on the secondary market are willing to pay.