On the Market: Priciest homes in the regionConversely, if the economy improves, "look for rates to nudge higher as the Treasury bids up . . . to finance our borrowing and the Fed raises rates in response to possible inflationary pressures," said Gillen, a Wharton School research fellow and vice president of Econsult.
"These forces will mostly offset each other for the rest of this year, and hence hold rates generally where they already are," he said.
The government is reportedly buying 80 percent to 85 percent of loan securitizations from Fannie Mae and Freddie Mac, which means it could overpay for these securities if the administration wanted to, resulting in lower mortgage rates.
"With the federal government holding this kind of market power, you can be confident that mortgage rates are about where the Fed and the Treasury want them to be," Lewis said. "That's in the mid to low 5's, and not in the 4's."
Thirty-year fixed mortgage rates were below 5 percent in 12 of the last 26 weeks.
Date Rate
Jan. 15 4.96
March 19 4.98
March 26 4.85
April 2 4.78
April 9 4.87
April 16 4.82
April 23 4.80
April 30 4.78
May 7 4.84
May 14 4.86
May 21 4.82
May 28 4.91
June 4 5.29
July 2 5.32
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