Summary:
The bond market, which influences mortgage rates, is navigating a lack of key government economic reports due to the shutdown. Despite this, recent non-government data, such as ADP’s employment report and the services sector report, showed stronger-than-expected results, pushing rates higher. Mortgage rates rose to near September levels, with MND’s 30-year fixed index reaching 6.37%. This shift reflects a broader trend since the Fed’s October meeting, highlighting the sensitivity of rates to economic indicators.
What This Means for You:
- Expect mortgage rates to remain volatile as the bond market reacts to limited economic data.
- Monitor non-government economic reports, as they can significantly impact rate fluctuations.
- Lock in rates now if you’re planning to refinance or purchase a home, as further increases are possible.
- Stay informed about Fed policy changes, as they will continue to influence long-term rate trends.
Original Post:
A common recent refrain is that the bond market (which dictates interest rates) is having to make do without many of the most important regularly-scheduled economic reports due to the government shutdown. While this means rates must “fly blind” on many of the days that would normally coincide with these government economic reports, there are other days that still play host to top-tier non-government data. Today boasted not one–but two such reports. Unfortunately for rates, both reports were unfriendly.
Rates tend to benefit from economic weakness. As such, when reports are stronger than expected, it pushes rates higher, all else equal. Today’s reports were both stronger.
ADP’s monthly employment tally came in at 42k versus a median forecast of 25k. This isn’t an especially large margin of victory, but it was enough to cause weakness in bonds earlier this morning. Less than 2 hours later, the most widely-followed report on the health of the services sector also showed stronger-than-expected results. Bonds continued to weaken after that, ultimately forcing lenders to raise rates back to levels just under those seen in late September.
If things had been even a little bit worse, we’d be at the highest rates in just over 2 months. As it stands, we’re close enough. MND’s 30yr fixed index rose to 6.37% today. September 25th’s level was 6.39, and that’s as high as we’ve been since September 4th.
In the bigger picture, rates are still much closer to 2025’s lows as opposed to the highs, but there’s been a palpable shift since the Fed meeting at the end of October.
Extra Information:
For further insights into mortgage rate trends, explore Mortgage News Daily’s Rate Index or read the Federal Reserve’s meeting minutes for updates on monetary policy. These resources provide valuable context for understanding rate movements.
People Also Ask About:
- What causes mortgage rates to rise? Strong economic data and inflation expectations typically push rates higher.
- How does the Fed influence mortgage rates? The Fed’s monetary policy decisions impact bond yields, which in turn affect rates.
- Should I lock my mortgage rate now? Yes, if rates are favorable, as they may increase due to economic strength.
- What is the 30-year fixed mortgage rate? It’s a long-term loan with a fixed interest rate, currently around 6.37%.
- How does the bond market affect mortgage rates? Bond market performance directly influences interest rates, including mortgages.
Expert Opinion:
The current rise in mortgage rates underscores the bond market’s sensitivity to economic indicators. With limited government data, non-government reports are playing a critical role in shaping rate trends. Borrowers should act cautiously, as further economic strength could drive rates higher in the near term.
Key Terms:
- Mortgage rate trends 2023
- Bond market impact on interest rates
- ADP employment report analysis
- Federal Reserve mortgage rate influence
- Non-government economic data impact
- 30-year fixed mortgage rate forecast
- Services sector report and rates
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