Calendar: What determines mortgage rates the week of February 21-25, 2022

Mortgage rates have reached their highest levels since 2019, and economists expect the pressure on rates to continue. Here’s a look at what could move the markets this week.

On Tuesday, the Federal Housing Finance Agency and S&P Case-Shiller will release separate reports on home values. The reports won’t move mortgage rates on their own, but the data will provide new insight into the white-hot housing market. Home prices have been plummeting for two years, part of an inflationary spiral that is sure to force the Federal Reserve to raise interest rates.

Also on the horizon are weekly data on unemployment insurance claims and housing starts, which are expected to be released on Thursday. And, as always, mortgage rates and 10-year government bond yields will be joined at the hip.

Mortgage rates rise and fall based on market sentiment, headlines and various economic indicators. Calculating rates is complicated, but here’s a simple rule: 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.

Fixed mortgage rates are influenced by other factors, such as supply and demand. When mortgage lenders have too much business, they raise rates to reduce demand. When business is light, they tend to lower rates to attract more customers.

Ultimately, the rates are set by the investors who purchase your loan. Most US mortgages are presented in the form of securities and resold to investors. Your lender offers you an interest rate that secondary market investors are willing to pay.

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