POST TAGSMarket Updates
Blog posted On March 06, 2023
Mortgage rates trended higher throughout most of last week largely due to the trading levels in specific bonds. It was mostly just continued momentum that kicked off last month with the release of reports showing strong economic data. Though strong economic data sounds positive, it oftentimes results in traders selling bonds and mortgage rates climbing higher. This week, we’ll potentially see more rate volatility with the releases of several important jobs reports including ADP employment change, job openings, and the employment situation reports. If the reports come in lower than expected, rates could trend lower.
Toward the end of last week, rates began trending lower thanks to underwhelming economic reports. This trend could be greatly altered this week with the release of different jobs reports. “The market is nimble and willing to react in a big way to important data on the horizon,” writes Matthew Graham, COO of Mortgage News Daily. “We expect [this] week to be volatile for several reasons with the biggest move coming on Friday after the jobs report.” The jobs report in refence is what the market calls the ‘employment situation,’ which includes data on average hourly earnings, the average workweek duration, government payrolls, manufacturing payrolls, nonfarm payrolls, private payrolls, the participation rate, and the unemployment rate. What does this information have to do with mortgage rates? While it doesn’t impact them directly, it does impact the bond market, which almost always correlates to changes in rates. If this data comes in with numbers that are above economists’ expectations, the bond market would see this as a sign of a strong economy, which would likely push rates higher.
In January, the employment situation was largely better than expected. This kicked off a month of higher-trending rates in February. This week, we get the news on what the employment situation looked like last month. For the most part, things are expected to cool off.
We’ll continue to keep you updated on the market movement! Let us know if you have any questions or want to discuss different loan options that could serve you best in the current environment.
Sources: Bloomberg, Mortgage News Daily, Mortgage News Daily