Mortgage Rates May Get a Breather this Week: Mortgage Reports

February 6, 2018 — 12:47 PM EST

Mortgage rates, which have been moving higher since the start of the new year, are expected to get a breather this week, with a lack of rate-moving news expected. According to The Mortgage Reports, with few economic reports scheduled for the week, mortgage rates may not inch higher, which has been the trend in recent weeks.

It doesn't hurt that the stock market has been plummeting over concerns of interest rate hikes, enabling mortgage rates to inch lower. When signs of inflation emerge, investors typically move out of bonds and mortgage-backed securities, which drives mortgage rates higher. If the reverse happens, mortgage rates tend to decline.

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According to a survey of daily mortgage rates, the average rate on a 30-year fixed-rate mortgage decreased six basis points Tuesday to 4.45%, as did the 15-year fixed-rate mortgage to 4.04%. Meanwhile, the 5/1 ARM mortgage rate dipped three basis points to 4.40%. Although mortgage rates are still at historical lows, borrowers have grown accustomed to rock-bottom mortgage rates, and as a result, they may balk at paying even six basis points more. There is also a concern that rising rates will dampen the spring real estate market, since first-time buyers are extremely price sensitive and could be shut out of the buying process if mortgage rates continue to move upwards.

In late January, mortgage applications dipped 2.6% as a result of the higher mortgage rates, according to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending Jan. 26. Refinancing home loans, which are the most sensitive to changes in mortgage rates, saw a 3% decline in applications. However, applications are still 3% higher than they were a year ago. According to the trade group, the refinancing share of mortgage activity has decreased to 47.8% of all applications and marks its lowest level since August. In the previous week, refinance loan applications accounted for 49.4% of all applications. Meanwhile, the share of adjustable-rate mortgage applications jumped to 5.7% of all loans, the Mortgage Bankers Association said.

As for economic data this week, The Mortgage Reports said that, outside of a few Treasury actions and Thursday's weekly unemployment numbers, there isn't much economic data that could move mortgage rates higher. Without more economic data being released, The Mortgage Reports noted that rates will be reliant on financial data, global financial and political news, and early morning tweets from President Donald Trump.