Calendar: What’s driving mortgage rates the week of July 5-9, 2021

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Mortgage rates are notoriously difficult to predict. They rise and fall based on market sentiment, headlines and a variety of economic indicators. Here’s a look at what could move markets this week.

The Labor Department’s job openings and labor turnover survey for June is scheduled for release on Wednesday. That report will offer insight into the health of the labor market.

Other data points will come from the retail sales report for June and weekly jobless claims, which comes out Thursday.

The calculus behind mortgage 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 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.

On the horizon

On July 13, the Labor Department will release the consumer price index for June. Prices rose sharply in April and May — with the caveat that this spring’s prices are compared to the worst of the coronavirus shutdown a year earlier.

Price inflation is another factor that figures in to mortgage rates. When inflation is low, rates trend lower. When inflation picks up, so do fixed mortgage rates.

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Written by
Jeff Ostrowski
Senior mortgage reporter
Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.
Edited by
Senior mortgage editor
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