Today's Mortgage Interest Rate News

As the election results came in, the bond market experienced a noticeable sell-off, primarily due to shifting expectations for a “red sweep” in Congress. Bond yields moved higher as markets adjusted for this possible outcome, though the reaction was actually more subdued than some anticipated. Ten-year Treasury yields increased by 0.19%, a relatively mild change given how drastically election results can influence markets.

For potential homebuyers, this moderate bond movement could mean a temporary bump in mortgage rates, though the market may wait to see final outcomes, especially with control of the House still undecided. This calmer response could offer a bit of breathing room for those considering a mortgage, as the bond market continues to watch election news closely.

Last week, it may have seemed like the bond market had paused its reaction to economic reports, possibly waiting until after the upcoming election. Even Friday’s jobs report didn’t seem to have the usual impact, with other market factors taking over soon after its release.

Today, however, a stronger-than-expected ISM report has caused a direct reaction, pushing bond yields higher in response. While this data is unlikely to be the main market driver for long (the election will take center stage regardless of outcome), it does highlight that economic data can still move markets when it’s impactful enough. For homebuyers, this suggests that mortgage rates can still fluctuate with major data surprises—though the focus is soon to shift, at least temporarily, to the election’s outcome.

This morning, 10-year Treasury yields are back to around 4.27-4.28%, right where they ended most of last week. So, while it may look like a rally, the reality is a bit less dramatic. The so-called “rally” is mainly a recovery from Friday’s sharp, panicky sell-off, rather than any major shift.

To put it in perspective, a 10-12 basis point move now is only about as significant as a 3-4 basis point move would be in calmer times. As for what’s driving today’s activity, it’s likely a mix of two things: a correction from Friday’s market positioning and a possible shift in election-related market sentiment. For homebuyers, this stability in bond yields could mean mortgage rates might hold steady in the short term, though further economic or political developments could always change things.

If it weren’t for the timely increase in Treasury trading volume around economic report releases, it might be easy to assume that economic data is currently taking a back seat for bond traders. This is unusual, especially during jobs report week, which typically impacts the bond market the most. However, today’s data releases were relatively in line with expectations, providing little momentum for any significant rate movement.

Jobless Claims came in as expected, matching recent trends, and core PCE inflation landed right on target at 0.3%, which is actually on the lower edge when looking at unrounded figures. Some lesser data points came in below expectations but didn’t provide a boost for bond prices. Most of today’s influence on bond activity seems to be stemming from international markets—particularly from the U.K.—rather than domestic economic signals. For homebuyers, this means mortgage rates may remain steady in the near term, though upcoming data could shift the landscape.

It’s been a notable morning in the bond market following the release of key economic data. The ADP employment report showed stronger-than-expected growth, typically a signal for rising yields and potentially higher mortgage rates. Shortly after, the Q3 GDP report came in slightly below expectations (2.8% versus 3.0%), but with a slight uptick in core inflation (2.2% versus 2.1%).

For context, this is the only Q3 GDP report likely to impact the market since subsequent updates will be considered less timely. Given the ADP report and inflation data, bond yields initially rose in response. However, surprisingly, just minutes after the GDP data was released, 10-year Treasury yields reversed course and dropped to their lowest point of the day.

This shift could seem deceptive, especially as the short-term 2-year Treasury yields are seeing steeper losses than gains in the 10-year. For homebuyers, this movement in longer-term yields may be a temporary relief, though the interplay between economic indicators and yields remains complex, influencing mortgage rate trends.

The Job Openings and Labor Turnover Survey (JOLTS) has shifted from being an overlooked report to a key indicator that can influence the bond market and, subsequently, mortgage rates. This morning’s JOLTS data came in weaker than expected, which typically might lead to a stronger bond market and lower rates. However, stronger Consumer Confidence numbers have created a mixed reaction.

As a result, bond yields are still in a slightly weaker position as we approach midday. For homebuyers, this means that while the weaker JOLTS data could suggest potential easing in mortgage rates, the strong consumer sentiment is holding them back. Keeping an eye on these economic indicators is crucial, as they can significantly impact your mortgage options.