Weekly Mortgage Rate Update- 10-3-2023

Good afternoon!  I decided to try making a video for the weekly update- let me know what you think and if you prefer this format- Its my first time making a video, so let’s keep that in mind :)  

https://clipchamp.com/watch/cBdPVtwOLHu

Green Day said it best, wake me up when September ends.  For the month of September mortgage rates moved up about .50% overall. However, waking up to October- we can’t say this month is off to a good start,  with rates continuing a steady march up.

This week brings a lot of employment data starting off today with the JOLTS report that shows the job openings, the report shows a significant jump after months of declining. A strong job market signals higher wages as employers attempt to entice job seekers to fill open positions. This is inflationary and rates are going up this morning in reaction.

Friday PCE – the Fed’s key inflation measure- showed double the inflation rate of the prior month, but the annualized pace of inflation has slowed to 3.9% year over year. Despite this somewhat good news – Rate markets continue to spike- it appears that the overall Market sentiment is shifting its outlook. 

From what I can gather- this shift is due to markets believing that inflation will remain elevated for longer and at a higher rate than previously thought.  Some factors contributing to this are: Rising oil prices, Strong employment/union strikes (higher wages= inflation), and maybe most important- the growing federal deficit and government incompetence to address it.

The debt ceiling debate was again pushed out till mid-November with a temporary deal.  The Fed is fighting inflation that is essentially being created with out-of-control spending and deficits.  The concern markets have is that without some governance, controlling inflation will be out of the Fed’s control.  This uncertainty is creating the volatility that is weighing on markets now.  

Normally we would expect some pull back after a swift move up over the past several weeks in rates- but we still seem to be in that “price discovery” phase of the shifting winds. Since the 10 year Note broke that important resistance level we mentioned a few weeks ago in the update at 4.34% - it has been relentlessly climbing.  As the time of this update- it is now at – 4.80%

For the week ahead, it would take a lot to improve rates, it is more likely we are set to trend higher after the JOLTS report this morning set the tone for this week.

Hang in there, and I will see you next week.

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.