Homebuyers hoping for a reprieve on mortgage rates might be disappointed. This week’s inflation report is a key indicator, but experts caution it may not be the tipping point for a significant drop in rates.

The Federal Reserve has raised interest rates to combat inflation, and those increases trickle down to mortgage rates. If the report shows inflation dipping, it could signal the Fed easing up on rate hikes, potentially leading to lower mortgage rates.

The picture isn’t so clear-cut. Recent inflation reports haven’t directly translated to rising mortgage rates in every instance. In fact, rates even dipped slightly after some reports earlier this year.

This week’s report is crucial, but so is the overall trend. If inflation remains stubbornly high, the Fed is unlikely to budge on interest rates, keeping mortgage rates elevated.

For potential homebuyers, the takeaway is this: a significant drop in rates this week seems unlikely. Those ready to move forward might be wise to lock in a current rate, with the option to refinance if rates do fall in the future.