Redfin issues blunt warning that this week's mortgage rates could remain volatile

In my years of reporting on mortgage rates, I've learned just how fickle they can be. And the last couple of months have been the perfect example: Rates increase for about a month, then inch down for a few weeks, then jump back up. All in a relatively short period.

May is peak home-buying season in many parts of the United States. So, if you're set on buying a home soon, it's helpful to have a general idea of what mortgage rates are doing so you can be mentally and financially prepared.

The real estate technology company Redfin has published new research about how it expects mortgage rates to perform in the upcoming week.

How does the Redfin Economists' Weekly Take predict mortgage rates will act this week? It's a word many of us would use to describe rates since late February: "volatile."

Weekly mortgage rate trends

Before we jump into Redfin's analysis of mortgage rates for the upcoming week, let's clear something up: We are not just referring to Freddie Mac rates.

Many people follow Freddie Mac mortgage rates, which are released every Thursday. This is a helpful source, but it isn't the only one for tracking interest rates. There are several tools, and each one uses its own methodology.

For example, Freddie Mac gathers rate data from Monday through Wednesday, then publishes resulting averages on Thursday. Mortgage News Daily updates its published rates at least once per day.

So, keep in mind that Redfin's outlook for mortgage rate trends this week doesn't exclusively apply to the ever-popular Freddie Mac averages. Overall trends will likely be similar across various tracking tools, but the exact rates you see will differ.

Federal Reserve activity could hurt mortgage rates

The Federal Reserve held its last meeting on April 28-29, when the central bank voted to keep the federal funds rate unchanged. The Fed's next meeting isn't scheduled until June.

The fed funds rate affects mortgage rates, but usually indirectly. Because mortgages are longer-term loans, they tend to follow the longer-term 10-year Treasury yield.

But the Fed's April meeting will probably have some long-term effects, which will impact mortgage rates.

"The most important shift from last week is that the Fed is moving from a 'waiting to cut' stance to 'waiting for more clarity on whether to cut or hike,'" writes Chen Zhao, head of economics research at Redfin. "That feels like a subtle change, but it matters for mortgage rates because long-term rates depend on where investors think the Fed is headed over the next few years."

The sentiment has been that the Fed would keep rates flat until they eventually decided to cut it, but now a rate increase is on the table.

Zhao writes that the Fed is acting more conservatively because inflation is still higher than it prefers, and the Iran war could impact inflation if high gas prices seep into other prices on other consumer goods.

The labor market is also experiencing a mix of pros and cons: Job creation has slowed, but layoffs are low overall, and unemployment levels aren't too bad. This mixture gives the central bank an excuse to wait on its decision to cut or hike the fed funds rate.

The Fed's uncertainty often makes investors uncertain, which can drive up mortgage rates.

Related: Housing market shift offers big opportunities in May 2026

Redfin says to keep an eye on the jobs market

Mortgage rates typically decrease when the economy is struggling, because lower rates make it easier for those hurting financially to afford a mortgage loan. There is a lot of employment data coming out this week that Redfin says we should keep an eye on. If the numbers are bad, home loan rates could inch down.

On May 5, the U.S. Bureau of Labor Statistics released the Job Openings and Labor Turnover Survey (JOLTS) for March. The job openings rate inched down from 4.2% in February to 4.1% in March.

Although the survey showed some positive economic news overall, the numbers were relatively flat.

More on the housing market and mortgage rates:

• Freddie Mac reveals shifting mortgage rate trends
• National Association of Realtors reveals problem with housing market, affordability
• Americans are losing money with this homebuying mistake

The Institute for Supply Management Services Business Survey committee released the ISM Services PMI Report for April on May 5. This report measures activity in the manufacturing and services sector.

ISM numbers came in slightly lower than expected, but the sector still expanded for the 22nd consecutive month.

The April ADP Employment Report, which evaluates the private-sector labor market, was released on Wednesday. It revealed that private organizations added 109,000 jobs in April, which exceeded expectations and was an increase from March.

So far, this week's various job reports are neutral or positive, signaling that the Fed won't cut its rate anytime soon. Investor perception that the economy is doing well could also push mortgage rates up this week.

We still need to wait for the jobless claims report on Thursday and - most important of all - the April jobs report on Friday.

Iran war creating mortgage rate volatility

Surprising moves from the Federal Reserve and uncertainty about employment are two reasons mortgage rates could be volatile this week. But the main reason is the ongoing war in Iran. Here's why:

• The Iran war is still causing oil prices to soar. The price per barrel for Brent crude closed at $118 on April 29, per Business Insider.
• High gas prices resulting from the war could translate to inflation on other consumer goods. The Fed is worried about this inflation risk, which is one reason the central bank plans to keep the rate steady or even hike it.
• "Any meaningful developments in Middle East peace negotiations or energy markets could very well overshadow all of the economic data," Zhao writes for the Redfin economic update.
• We don't know what will happen next with the war, so any surprises could steer mortgage rates in one direction or another.

Related: Zillow shares shift in home sales, housing market

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This story was originally published May 6, 2026 at 5:37 PM.