Consumer prices increased in December, but underlying inflation remained tame. Low inflation is good because rising inflation can pressure mortgage rates higher.

President-elect Joe Biden released his plans for more fiscal stimulus when he takes office. The added stimulus is expected to help the economy but could pressure mortgage rates higher.

Jobless claims surged last week, confirming a weakening in the labor market as virus counts rise and the pandemic disrupts operations at restaurants and other businesses.

After setting more than a dozen record lows last year, rates started 2021 on an upward climb. Refinance applications rose 20% last week as borrowers tried to beat further increases.

Only 16% of respondents to Fannie Mae's December National Housing Survey feel that housing prices will fall in 2021. More than 50% felt it was a good time to buy or sell a home.

According to a Wall Street Journal report, builders are building tens of thousands of homes to be used as rentals, believing rentals will stay in high demand as prices continue to rise.