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Mortgage Interest Rates Forecast

Mortgage rates climbed to 6.42% as stubborn inflation persists and markets eye the incoming Federal Reserve leadership.

Abby Badach Doyle
Johanna Arnone
Updated
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Mortgage rates are inching higher again as inflation concerns continue to brew. The average 30-year fixed-rate mortgage jumped 17 basis points to 6.42% APR for the week ending May 21, according to Zillow data provided to NerdWallet. Geopolitical tensions, like the conflict in Iran, have been driving this stubborn upward trend since the end of February.
Incoming Federal Reserve Chair Kevin Warsh takes the reins tomorrow, inheriting the tricky job of balancing sticky inflation against a cooling labor market. Recent Fed meeting minutes show that policymakers are increasingly worried that high oil prices will keep inflation around longer than expected, and they've even hinted at future rate hikes if things don't cool down.
» MORE: Is it a good time to buy a house?

🤓 From the Nerds: Kate on Rates

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May mortgage rates forecast

Mortgage rates are still expected to stay fairly close to current levels in May, though the recent uptick in inflation could keep upward pressure on borrowing costs. Markets are also watching the Iran conflict closely, since higher energy prices have been a major driver of recent rate volatility.
For now, the Fed is expected to hold steady in June, which could help prevent rates from making any dramatic moves in the near term.

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