After new record lows for mortgage interest rates, last week we saw rates inch upward at the end of the week.
What happens next could be influenced by financial news in Europe. Midweek, we expect that stock prices will drive bond trading and mortgage rates. Our most important and influential data of the week will come on Friday when the September Employment Report is released.
Good news about jobs and employment will mean good news for the U.S. economy but bad news for mortgage rates. Unfortunately, we can’t have it both ways.
No one has a crystal ball that foretells interest rates. Therefore, my philosophy remains: If you see an interest rate you like, lock the rate and be safe from volatility.
2 thoughts on “First Week in October: What’s Ahead for Interest Rates?”
This may be a dumb question… but why is it that mortgage rates go down with jobs and employment go up? Probably worth a blog post on it’s own for explaining… but i’ve always been curious why this is.
That’s a good question. The reason we can see rates go down when though seemingly good economic news comes out (such as when jobs/employment) goes up is because the market is anticipatory. It’s all about what the investors anticipate will happen versus what actually does happen.
Earlier this week, we saw that jobs increased, but they did not increase as much as investors expected. Thus, this good news was seen as disappointing news.
The disappointment of jobs/employment not increasing as much as anticipated = bad news = mortgage rates decrease.