Market Update: Weak Economic Data and Jobs Reports Cause Best Rate Rally in Months

Blog posted On November 07, 2023

Mortgage rates finally caught a break last week. After months of strong economic data pushing rates higher, we finally saw some relief in last week’s jobs reports. Most of the numbers came in lower than expected, indicating that the labor market is returning to historically normal levels. Rates reacted by trending lower – much lower. In fact, they had the best three-day streak since March 2023. Some say it was the best three days of news in the past two years.

News that affects mortgage rates

If you’re wondering what employment data has to do with mortgage rates, you’re probably not alone. Over the past two years, there have been a handful of reports that have had a distinct impact on rates. Here is a brief summary.

Though inflation has been cooling over the past several months, employment data has been stubbornly strong. We’ve been needing lower jobs numbers to indicate that the economy is cooling, inflation will continue trending lower, and everything is returning back to normal.

Lower-than-expected jobs numbers give rates a break

Last week’s employment situation, which was released on Friday, showed that the labor market is cooling back to historically normal levels. This caused rates to have “some of the best 3 days of news for mortgage rates and bonds that we've seen since rates first began to launch higher 2 years ago,” noted Matthew Graham of Mortgage News Daily. In fact, last week had the third-biggest rate improvement in over a decade.

What to do next

• If you’ve been waiting for rates to fall, now’s your time to jump in
• If you’re not ready to buy, but want to in the next several months, consider a rate lock to protect you against rising rates (and if they fall more, you can re-lock once!)
• If you think your purchase is further down the line/next year, it’s still a good idea to get preapproved now so you can be ready to jump in ASAP!

Sources: Mortgage News Daily,