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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Heading into Thanksgiving, housing economists saw the worst of the coronavirus pandemic in the rear-view mirror, and nothing but rising ahead. But the sudden emergence of the omicron variant brings new uncertainty to the outlook for mortgage rates. Worries about a resurgence of coronavirus cases are weighing on stock markets, and on U.S. Treasury yields, which plunged Tuesday morning. The yield on 10-year Treasury bonds fell by nearly 10 basis points, to 1.431 percent. Last week, yields were in the range of 1.65 percent. That matters to homeowners and homebuyers because rates on 30-year mortgages are closely tied to 10-year Treasury yields. The average rate on a 30-year loan was 3.24 percent last week, according to , up from an all-time low of 2.93 percent in January. Some mortgage watchers say the pandemic’s latest twist will push mortgage rates down. “For now, it’s all about omicron,” says economist Joel Naroff. “COVID is not going away anytime soon.” Ken H. Johnson, a housing economist at Florida Atlantic University, also sees mortgage rates reversing course. “Uncertainty over the impact of the omicron variant and the potential for rising inflation is driving a lot of money to safe haven investments – mortgage bonds, 10-year Treasury notes, etc.,” he says. Before the omicron variant grabbed headlines, mortgage rates had been poised to rise. The . While that move creates upward pressure, mortgage rates are unlikely to spike as a result of the taper. However, the Fed’s changing stance does set the stage for a gradual rise in rates. The Mortgage Bankers Association, for instance, expects the average rate on a 30-year mortgage to reach 3.5 percent by mid-2022 and 4 percent by late 2022. Economists generally expect rates to rise by the end of 2022. As mortgage rates make a predicted slow climb to the 3.5 percent range, decreased purchasing power might ease some of the pressure on home prices. Meanwhile, Federal Reserve Chairman Jerome Powell told a Congressional committee on Tuesday that he was looking at winding down the central bank’s buying of bonds and mortgage-backed securities faster than previously expected. Powell said that in light of a “very strong” economy, “it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases … perhaps a few months sooner.” The Fed ramped up those asset purchases as a way to fight the coronavirus recession. But the “taper” is expected to create upward pressure on mortgage rates. Learn more
SHARE: 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. Related Articles