POST TAGSMarket Updates
Blog posted On October 02, 2023
Last week, mortgage rates initially trended higher due to weakness in the underlying bond market. However, when we see a notable upward trend in rates, we can normally expect a ‘bounce’ lower at some point. This is exactly what we saw on Thursday and Friday. While the drop didn’t take rates lower than they were a couple of weeks ago, it did help them recover the ground they lost throughout last week. What will it take for them to continue dropping lower?
Bounces are nice. But rates have been on quite the rollercoaster lately, fluctuating up and down. Unfortunately, it’s likely that the most recent bounce was just that – temporary. For us to see a longer lasting downward trend, we’ll need economic data (and the overall economy) to cooperate. Specifically, we would need to see WORSE economic data. It sounds backwards, but when it comes to mortgage rates, the weaker the economy, the better.
Right now, the economy is surprisingly resilient. While many experts have been talking about an impending recession for the past year, the economy hasn’t slowed its roll. Though inflation is cooling, the jobs market is still going strong. Many Federal Open Market Committee (FOMC) members have noted that for them to consider lowering the benchmark interest rate, they would need to see consistently lower numbers in jobs data like payroll numbers, job openings, and more.
Which brings us to this week. This week we get some huge jobs reports coming out. ADP nonfarm employment, job openings, and the employment situation. Not to mention the weekly jobless claims data. Should these numbers come in lower than expected, we could see some relief in rates. However, the opposite is possible as well.
Either way, it’s going to be a big week for rate news, so stay tuned and let us know if you have any questions.