Weekly Mortgage Rates Rise on the Heels of Promising Labor Data

Mortgage rates fell for three weeks in the lead-up to the Federal Reserve’s Oct. 28-29 meeting, but now APRs are starting to turn around.

As new employment data showed a strengthening labor market, the average 30-year fixed-rate mortgage rate rose 17 basis points from April’s 6.18 percent in the week ended Nov. 6, according to rates provided to NerdWallet by Zillow. A basis point is one hundredth of a percentage point.

The decision of the Fed Cut the federal funds rate last week While the announcement was widely anticipated, several members of the Federal Open Market Committee publicly voiced their support for it.

Mortgage rates rose ahead of the meeting in anticipation of a Fed move, but rates are now reflecting mixed views on what the central banker might do in December.

During the Fed meeting, central bankers have three possible actions:

1. Low interest rates to boost employment.

2. Increase interest rates to try to reduce inflation.

3. Hold rates steady to await new data (or to balance inflation and employment, if the Fed likes the numbers).

The central bankers’ October vote was mostly about boosting the labor market, which had shown signs of trouble before the government shutdown.

Now, new data from payroll solutions provider ADP released on November 5 shows that employment Somewhat recovered Last month, private employers added 42,000 jobs.

“Private employers added jobs in October for the first time since July, but it’s the first time we’ve reported it earlier this year,” ADP chief economist Neela Richardson said in a press release following the report.

This modest recovery means that the Fed may no longer see unemployment as the biggest threat to the economy (read: they may stop Cutting rates) and focus on inflation instead.

Despite assurances from President Trump that “we don’t have inflation,” a statement from the Treasury Borrowing Advisory Committee released on November 3 indicates that. Inflation Still above the Fed’s target of 2%.

The statement also said that unemployment is not a major threat to the economy at present. “Indeed, labor markets tend to remain in equilibrium as labor demand softens.”

There’s a good chance mortgage rates will rise, but we still have weeks until the next time the Fed makes a decision. Federal funds rate.

At least, it doesn’t look like the mortgage rates we’ve seen in the days leading up to the October meeting, unless we get assurances of another cut before the December meeting.

It is unlikely, since immediately after last week’s meeting. Later, Fed Chair Jerome Powell noted at his press conference that a December cut was not a certainty. And again, if the Fed wants to prioritize inflation over job growth, they won’t be able to cut.