Today's Mortgage Interest Rate News

Bond markets are starting the week under more pressure, following the weakest stretch of selling since the Federal Reserve meeting in late October. When bonds sell off, their prices fall. Falling bond prices push yields higher, which generally puts upward pressure on mortgage rates.

Some of this weakness may reflect investors preparing for several major events happening over the next few days. Markets often adjust ahead of Federal Reserve announcements. There are also multiple Treasury auctions this week. Auctions add a large amount of new bonds to the market, and during quieter times of year, that extra supply can pull bond prices down and nudge yields higher.

Another factor is Tuesday’s JOLTS report, which tracks job openings. It is not as influential as the main monthly jobs report, but it still gives investors clues about the strength of the labor market. A strong labor market often encourages investors to move money into stocks and out of bonds. When money leaves bonds, bond prices fall and yields rise. A weaker labor reading would typically have the opposite effect.

All of these forces combined have pushed the 10-year Treasury yield toward the upper end of the range it has held for the past several months.

For homebuyers, this means mortgage rates could be more reactive this week. Strong economic news or active selling in the bond market often pushes rates higher, while weaker data or stronger bond demand can help rates improve.

Week Ahead

Here are the key events in the next seven days that could influence bond prices and mortgage rates, along with simple explanations of how each one matters:

1. JOLTS Job Openings – Tuesday
This report shows how many open jobs employers are trying to fill.

• If job openings are high: It signals strong economic demand. Investors often shift toward stocks, pushing bond prices down and yields up, which can push mortgage rates higher.
• If job openings fall: It suggests the economy is cooling. Investors may buy more bonds, which pushes bond prices up and yields down, helping mortgage rates improve.

2. Treasury Auctions – Tuesday through Thursday
The government will sell batches of new Treasury bonds.

• More supply on the market: Can temporarily lower bond prices, raise yields, and place upward pressure on mortgage rates.
• Strong investor demand: Can lift bond prices and lower yields, which is supportive of better mortgage rates.

3. Weekly Jobless Claims – Thursday
This measures how many people filed for unemployment benefits last week.

• Lower claims (strong job market): Investors may favor stocks over bonds, which pushes bond prices down and yields up, making mortgage rates more likely to rise.
• Higher claims (weaker job market): Investors often buy more bonds, helping bond prices rise and yields fall, which can help mortgage rates move lower.

4. ISM Services Report – Friday
This is a broad look at how the service side of the economy is performing.

• Strong reading: Suggests the economy is expanding. Bond prices often fall, yields rise, and mortgage rates can tick higher.
• Weak reading: Suggests slower economic activity. Bond prices often rise, yields fall, and mortgage rates may improve.

This week’s bond market has followed its own path, mostly ignoring the economic reports that were released. On Wednesday, the market barely reacted to major reports like ADP and the ISM Services Index. Today’s reports were even less likely to move markets. The PCE inflation data was months old due to a delayed release, and the Consumer Sentiment survey rarely creates much impact.

Because the data offered little guidance, bonds spent the past five days drifting back toward their usual range. This kind of calm movement often happens when traders are waiting for more meaningful events.

For homebuyers, this means the bigger shifts in mortgage rates are still ahead. Major events are on the way, including next week’s Federal Reserve announcement and the monthly jobs report the week after. These reports tend to influence how investors feel about the strength of the economy. Strong economic news typically pushes bond prices down and causes yields to rise, which can push mortgage rates higher. Weak economic news tends to do the opposite, helping bond prices rise and allowing yields and mortgage rates to move lower.

In short, this week was quiet, but the next two weeks have the potential to bring more noticeable movement in mortgage rates.

Bond markets were already a bit weaker overnight, and this morning’s Jobless Claims report added to that pressure. New filings for unemployment benefits dropped to 191,000. That is not only the lowest reading since 2022, but also one of the lowest weekly results seen since the 1960s.

A single week of unusually strong data does not carry the same weight as a major monthly jobs report, and continued claims (which track people who remain on unemployment) did not show any major changes. Even so, today’s numbers point to a labor market that is still very strong.

For homebuyers, strong job numbers matter because they often push investors toward the stock market instead of bonds. When money moves out of bonds, bond prices fall. Falling prices cause yields to rise, which puts upward pressure on mortgage rates.

In short, today’s report suggests that the job market is holding up well, and that kind of strength can make it harder for mortgage rates to move lower in the short term.

The bond market opened on a stronger note today, with the 10-year Treasury yield nearly 4 basis points lower early in the session. The ADP employment report also came in much weaker than expected, showing a loss of 32,000 jobs instead of the forecasted gain of 10,000.

Normally, weaker job data would push investors into bonds, which raises bond prices and helps bring yields down. But that is not what happened this morning. The market barely reacted to the ADP report. There was very little trading activity tied to the release, and almost no noticeable movement in yields.

Most of today’s improvement actually happened earlier, between 6:00 and 7:30 a.m. Eastern time. By the time the ADP numbers were released, yields had already moved lower, and soon after the report, they drifted back toward pre-ADP levels.

The next major report of the morning is the ISM Services Index, scheduled for 10:00 a.m. Eastern. This report can sometimes influence the bond market because it provides a snapshot of how the service sector of the economy is performing.

For homebuyers, the key point is that falling bond yields can help create a more favorable environment for mortgage rates. Even though the ADP report did not drive today’s early improvement, lower yields still point to slightly better rate conditions heading into the rest of the trading day.

As the new month begins and traders position themselves ahead of next week’s Federal Reserve announcement, the bond market is showing a noticeable pattern. Shorter-term Treasuries are performing better than longer-term Treasuries. For example, two-year Treasury yields are slightly lower, while ten-year Treasury yields are slightly higher.

This matters because mortgage-backed securities, which help determine mortgage rates, behave more like shorter-term bonds than long-term ones. When shorter-term bonds are holding up better, mortgage-backed securities often benefit as well.

That is what we are seeing today. Mortgage-backed securities and five-year Treasuries are showing small gains, even though ten-year Treasuries are a bit weaker.

For homebuyers, this is a positive setup. When mortgage-backed securities improve, their prices move up. Higher prices mean lower yields, and that can help keep mortgage rates steady or push them slightly lower, even when longer-term Treasuries like the ten-year note are under some pressure.

Bonds opened the week on a noticeably weaker note, giving back the improvement they made last week. That kind of quick reversal is common during the Thanksgiving period, when lighter trading can create more unpredictable market movement.

One possible factor today is news from the Bank of Japan. Officials there suggested they might raise their own interest rates at their next meeting. In the past, major policy shifts from Japan have caused sudden reactions in global bond markets, including here in the United States. Because today’s weakness does not have an obvious cause, some traders are pointing to Japan as a possible influence.

Still, it is difficult to say whether Japan is the main reason for today’s bond selling. The market often moves more sharply during holiday weeks even without major headlines.

For homebuyers, weaker bond prices generally mean higher yields. When yields rise, mortgage rates tend to move higher as well. Today’s movement is not tied to US economic data, but it is a reminder that global financial news can still affect the environment for mortgage rates.