Mortgage Rates Today, Friday, May 1: Noticeably Lower
- company NerdWallet
- company Zillow
- location Houston
- location Iran
- location Pittsburgh
- location Texas
- person Abby Badach Doyle
- person Jeanette Margle
The average U.S. mortgage rate moved in opposite directions this week, with one report showing a drop to 6.1% on Friday and another showing a rise to 6.27% by Monday, as geopolitical turmoil continued to sway bond markets.
The average interest rate on a 30-year, fixed-rate mortgage fell to 6.1% APR on Friday, May 1, according to rates provided to NerdWallet by Zillow [1]. That was 12 basis points lower than the previous day and two basis points lower than a week earlier [1]. By Monday, May 4, the same publication reported that the average rate had climbed to 6.27% APR [2]. The divergent figures reflect the speed at which investor sentiment can shift in response to global events [1][2].
Both reports tied the rate movements to the conflict in Iran. NerdWallet noted that a blockade in the Strait of Hormuz has choked off global oil supply, raising energy prices and putting upward pressure on inflation [1]. Inflation fears then shake the bond market, and because mortgage rates tend to follow bond yields, rates rise when yields do [1]. The Monday report stated that investors were reacting to geopolitical uncertainty caused by the Iran war, pushing mortgage rates higher [2].
The Federal Reserve held its benchmark interest rate steady at its meeting during the week, a decision both reports highlighted [1][2]. The Friday report said the Fed kept the rate unchanged in an effort to steady the economy throughout the turmoil [1]. The Monday report confirmed the Fed left its rate the same at its recent meeting [2]. The central bank does not set mortgage rates directly, but its stance influences the direction they tend to move [1].
Signs of a cooling job market could ease inflation pressure, potentially improving bond yields and mortgage rates, according to the Friday report [1]. The publication noted that upcoming employment data releases, including the Job Openings and Labor Turnover Survey and the Employment Situation report, could tip the scales for future rate direction [1].
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