Mortgage rates just fell again, despite inflation soaring to 13-year high — what’s going on?

While analysts fretted over the high rate of inflation in the U.S. economy, mortgage rates once again decreased.

“Low rates offer homeowners an opportunity to lower their monthly payment by refinancing, and our most recent research shows that many borrowers, especially Black and Hispanic borrowers, who could benefit from refinancing still aren’t pursuing the option,” Freddie Mac chief economist Sam Khater said in the report.

The fall in mortgage rates came as somewhat of a surprise to market observers, given reports this week that pointed to a growing rate of inflation in the economy. “While I don’t expect double-digit mortgage rates any time soon, I do expect mortgage rates to follow Treasury yields higher as the combination of abundant supply and concerns about inflation, mean that investors expect higher returns,” she added.

The Federal Reserve has largely dismissed concerns about inflation. In many cases, rising prices appear to be a pandemic-related fluke. For instance, the cost of airfare saw a record increase, which could be a reflection of people’s suddenly renewed interest in traveling as vaccinations roll out.

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