Weekly Mortgage Rates Rise Under Gloomy Economic Clouds

The average rate on a 30-year fixed-rate mortgage increased 17 basis points to 6.42% APR for the week ending May 21. Since the start of the war in Iran on Feb. 28, mortgage rates moved from the high-5% range to the mid-6% range. That change likely adds about $100 per month in interest on a $400,000, 30-year fixed-rate mortgage. The Federal Reserve does not set mortgage rates directly, but it influences them through the short-term borrowing rate. Federal Reserve meeting minutes from April 28-29 show policymakers kept the federal funds rate unchanged while growing more concerned that inflation could last longer than expected. Higher oil prices related to the war in Iran were cited as a major factor, with energy and transportation costs expected to continue affecting consumer prices.

"The average rate on a 30-year fixed-rate mortgage rose 17 basis points to 6.42% APR in the week ending May 21, according to rates provided to NerdWallet by Zillow. (A basis point is one one-hundredth of a percentage point.) We calculate our weekly average using daily APRs recorded over the past five business days."

"Since the war in Iran began on Feb. 28, mortgage rates have risen from the high-5% to the mid-6% range. That's probably not enough to cancel your homebuying plans, but it's enough to add about $100 a month in interest on a $400,000, 30-year fixed-rate mortgage. Between gas, groceries and everything else inflation has touched lately, buyers may feel that extra $100 more than they would have a year ago."

"The Federal Reserve doesn't determine mortgage rates, but it does influence them indirectly by setting its short-term borrowing rate. Yesterday, we got the tea - er, meeting minutes - from the most recent Federal Reserve meeting on April 28-29. We already know the conclusion: The central bankers voted to keep the federal funds rate unchanged, in a widely expected move."

"But the newly released notes suggest policymakers are becoming more concerned that inflation may linger longer than expected. Higher oil prices tied to the war in Iran were a major reason why. Fed officials warned that rising energy and transportation costs could continue working their way into consumer prices in the months ahead, even if t"

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