Mortgage loan rates fluctuate around historical lows for several months. While economists expect rates to rise by the end of the year, mortgage interest rates have become logical: they rise, fall, and then repeat. Here’s a look at what might be driving the markets this week.
On Monday, the National Association of Realtors is to publish its July home sales report. And on Tuesday, the US Census Bureau and the US Department of Housing and Urban Development will release a joint report on new home sales for the last month.
The reports themselves do not affect mortgage rates, but the statistics reflect the state of the housing sector, which was characterized by record low stocks and high house prices.
Also on the horizon are weekly jobless claims data on Thursday. And, as always, mortgage rates and 10-year government bond yields will be combined.
Mortgage rates rise and fall based on market sentiment, news headlines and various economic indicators. The math of grading is tricky, but there is one simple rule of thumb: Fixed rate mortgage for 30 years closely monitors the yield on 10-year Treasury bonds. When that rate rises, the popular 30 year fixed rate mortgage tends to do the same.
Tariffs for fixed mortgage are influenced by other factors such as supply and demand. When mortgage lenders they have too much business, they raise rates to reduce demand. When things go easy, they tend to cut rates to get more customers.
Ultimately, the rates are set by the investors who buy your loan. Most US mortgages are packaged in securities and resold to investors. Your lender offers you an interest rate that secondary market investors are willing to pay.