Weekly Mortgage Rates 05-01-2026

Weekly Mortgage Rates

May 1, 2026

The temporary improvement in mortgage rates has faded over the past week, with rates trending higher and breaking through a key support level that had kept them in check.

Welcome to the Jungle

Oil prices are leading mortgage rates higher, both have reversed course after a few weeks of relief following the ceasefire and early optimism that the conflict would be short-lived. That mood is shifting. The market is coming to terms with the reality that even if the conflict ended today, we are still at the beginning of what may be the largest oil supply disruption in history. The IEA has described it as the energy crises of ’73, ’81, and ’02 combined.

This is all unfolding against the backdrop of an AI investment boom, with companies expected to invest $100 billion into data centers this year alone. The stock market is ignoring the conflict and continues to set new records.

On Thursday, the Fed’s preferred inflation gauge PCE was released covering the first full month of the Iran War, and inflation is already moving in the wrong direction. March headline PCE rose 0.7% for the month, putting the annual pace at 3.5%, the highest since May 2023, when the Fed was still in a rate-hiking cycle. Core PCE, which strips out food and energy, came in at 3.2% annually. Both readings are well above the Fed’s 2.0% target with no sign of easing.

The longer the Strait of Hormuz remains disrupted, the more the economy will feel the pressure of higher prices and supply chain strain. Sustained cost increases will eventually slow growth, which could bring rates down, but with AI investment running this hot, will that show up in the data? The K-shaped economy where asset holders grow wealthier while non-asset holders fall further behind appears set to worsen.

The current environment is unprecedented and uncertain, but one thing seems clear: owning assets is the right move. Fortunately, we’re in the business of helping people do exactly that. Framing real estate as a hedge against inflation rather than focusing on the hope that mortgage rates will drop may be the most compelling conversation we can have with buyers right now.

Take This Job and Shove It — Powell’s Last Meeting as Fed Chair

A defiant Fed Chair Powell held his final press conference as chair this week and announced he will remain on the Board of Governors rather than follow the tradition of stepping down entirely, citing concern for protecting Fed independence.

While the meeting ended with rates unchanged as expected, the real headline was the dissent. A Fed notorious for consensus is now more divided than it has been in three decades. Four FOMC members voted against the consensus. Three regional bank presidents supported holding rates but voted to remove the easing bias from the policy statement, signaling they believe the next move could be a hike, not a cut. Gov. Stephen Miran dissented in the opposite direction, voting for a 25 bps rate cut.

What’s Ahead

Next week brings the April employment data another touchstone on the economy that will be closely watched, but still secondary to whatever develops in the Middle East.

Unfortunately, the technical picture is working against us right now. The 10-year Treasury yield is trending higher and has broken through a key support level, meaning the path of least resistance is toward higher rates. We are in a locking bias for clients. It will take a significant catalyst to reverse direction in the near term.