The Relationship Between Mortgage Rates And The Price Of Oil

Higher Oil, Stable Inflation and Lower Mortgage Rates:

It's widely believed that if oil moves higher so does inflation which means mortgage rates move higher as well. And in a very broad general way that is somewhat true.

Are you thinking that whenever oil moves significantly higher so does inflation and mortgage rates?

From December 2018 to April 2019 the price of oil increased significantly however inflation was moderate and mortgage rates moved lower. 

Does this mean we don't need to worry about the price of oil pushing inflation and mortgage rates higher? Absolutely not.

How To Use Oil Price Properly When It Comes To Mortgage Rates:

When making a determination as to the direction mortgage rates will go never use one component in your decision making. Oil prices do not dictate mortgage rates. They can have an influence/impact on mortgage rates but they do not directly dictate the mortgage rates consumers obtain when they apply for a mortgage.

If you are looking to refinance your current mortgage or purchase a home and want to evaluate the direction of mortgage rates then I suggest looking at more than just oil, or just the employment report or just the Fed.

I suggest you look all of those things and more.

But at the end of the day you must understand this important fact; no one can accurately predict mortgage rates. What you can do is make an educated guess based on all the various components to mortgage rates to help guide you in making a determination on when you should lock in your mortgage rates/terms.