Mortgage rates were lower yet again, making for an astonishing 10th consecutive day without rates moving higher. In the 13 days of rate sheets since the September 6th jobs report, rates have only risen once. After only being able to claim 6-week lows yesterday, today’s rate sheets are the best in at least 2 months (very close to 3 months).
With each passing day, we have more and more confirmation that the FOMC announcement and most recent Employment Situation Report marked and confirmed at least a short term turning point for interest rates. This is the consolidation/correction that we’d been hoping for, and we’re now a day or two into it.
The future path of rates is fairly uncomplicated at the moment. Markets are comfortable treating early September rates as near term highs as long as the economic data doesn’t surprise to the upside. That means that the fate of rates is tied to the economic reports that come out most mornings. Stronger data will gradually persuade investors that the Fed will reduce the pace of bond buying sooner than later.
On some small scale, that was a risk this morning, but Consumer Confidence came in slightly weaker than forecast, and rates continued to improve. We’ll face similar risks with tomorrow’s data, but it will either take a concerted effort from several reports or a strong Employment Situation report on Oct 4 to completely dash the dreams of this low-rate rebellion. Between now and then we’ll likely see some ups and downs, as opposed to the exclusively flat-to-sideways bias we’ve had since Sep 6th.