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Mortgage rates stay elevated as inflation cools but oil risks rise

Zillow Research said softer June inflation reduced expectations of a near-term Federal Reserve rate increase, but higher oil prices are weighing on the inflation outlook and mortgage borrowing costs.

Reported · Written up by our desk · Mortgages

Mortgage rates remained elevated as the outlook for inflation and energy prices diverged, according to Zillow Research.

The outlet said cooler inflation data from June lowered the likelihood of a near-term Federal Reserve rate increase, which typically helps ease mortgage rates.

However, Zillow Research pointed to renewed oil risks and higher oil prices, which can put upward pressure on the broader inflation outlook.

With those offsetting forces in play, Zillow Research said mortgage rates continue to face pressure despite the relief from inflation cooling.

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