Mortgage Rates Today, May 19, 2026: Rates Remain Dependent on Middle East News

The bigger picture

Mortgage rates today remain at their highest level since Mar. 27. Bond markets (one of which largely determines mortgage rates) remain nervous about the inflation being generated by the Middle East crisis.

Absent progress in resolving that dispute and the opening of the Strait of Hormuz, we struggle to see more than limited and temporary falls in the coming weeks. Indeed, some expect yet higher oil prices and inflation rates, which are highly likely to put upward pressure on mortgage rates.

Yesterday, MarketWatch warned that most countries (including the U.S.) had been dipping into their strategic petroleum reserves to maintain supplies of gas and diesel and so rein in rising prices, at least a bit. "'The oil market may need to see evidence of current supply buffers
running out before traders finally trigger another big move higher,' said Stephen Innes, managing partner at SPI Asset Management," according to its report.

However, the longer the Strait of Hormuz remains closed, the closer we'll get to those buffers running dry. And there may not be much room for oil prices, which mortgage rates have been tracking in recent months, to fall far or for long once the prospect of real shortages looks near.

Scroll on down for details of today's economic reports and how they might affect mortgage rates.

What's coming up?

Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning the war, employment, inflation, tariffs, and deficit funding are especially influential at the moment.

You might have noticed worrying reports in the financial press about the likelihood of inflation getting worse. For example, in an e-newsletter on May 10, The Economist wrote, "The Iran war is already causing pain for American motorists, who are paying more than $4.50 a gallon for petrol. Now Americans face a grocery-price shock."

On May 11, MarketWatch had similar concerns: "The surge in gasoline prices tied to the Iran war is set to drive U.S. inflation to a three-year high — and it might get worse before it gets better.

" ... That’s not the only downside of higher inflation," the report continued. "The increase in prices has handcuffed the Federal Reserve. The central bank is likely to be stymied from cutting interest rates aggressively, leaving the cost of borrowing painfully high for prospective home buyers and anyone who needs a big loan."

Last week's price indices (the CPI, PPI and IPI ) tend to add weight to these pessimistic arguments. And, with inflation rates already so high, Kevin Walsh, who was confirmed on Wednesday as the new chair of the Federal Reserve, may struggle to deliver the lower general interest rates for which he was nominated.

Bond markets vs. stock markets

Mortgage rates are largely dictated by yields on a type of bond, the mortgage-backed security (MBS). So, we focus on bond markets.

On May 7, The New York Times explored why stock markets and bond markets have been behaving so differently since the start of the conflict in the Middle East.

Investors in stocks have been wagering that U.S. companies will continue to generate large profits during the conflict. And the stock market typically cares only about whether dividends and company values will continue to rise.

"But the bond market is another matter," says The Times. "Bond traders have maintained a much sharper focus on risk. Yields remain correlated with shifts in the price of oil. As oil prices have spiked and inflation has risen, yields have risen and bond prices, which move in the opposite direction, have fallen."

Comerica Bank's weekly preview

On Monday, Comerica Bank published its weekly preview:

"The minutes of the Fed’s April meeting are unlikely to surprise markets: With the Iran War pushing up inflation but also clouding the growth outlook, FOMC members mostly agree they should hold rates steady near-term. Their guidance may be more circumspect than usual out of courtesy to incoming Chair Warsh, who will want to make a mark on the Fed’s communication at upcoming meetings even if he doesn’t try to change rates. In any case, the war and energy prices will influence the rate outlook more than the Fed leaders’ baton pass.

"The University of Michigan’s Consumer Sentiment Index will likely be revised a bit higher in the final May release, but remain the lowest in the survey’s nearly 50-year history. Consumer inflation expectations likely held near April’s elevated levels. AAA reports the national average gas price reached another four-year high in early May."

Comerica also thought that this week's housing data would probably soften, compared with March.

Comerica's predictions often differ from market expectations, which are a consensus of a wider pool of analysts' forecasts.

Mortgage rates today

There is only one economic report on today's MarketWatch economic calendar. It covers pending home sales in April, and markets expect those to grow by 1% that month, compared with 1.5% in March.

Mortgage rates tend to fall when a report's actual figures are worse for the economy than expected, and to rise when they're better. When numbers are on or close to forecasts, those rates rarely move in response to the data.

We'd normally make a fuss about the minutes, scheduled for release tomorrow, of the last meeting of the Federal Reserve's rate-setting committee. These publications can be influential.

However, we'll be surprised if these minutes are. Inflation is currently running too warm for the Fed to cut general interest rates anytime soon, and some on Wall Street are now wondering whether a hike is going to be the next change in rates.