Mortgage Rates Start Higher and Finish Lower

Mortgage rates began the day at new multi-decade highs, but only by a small margin over yesterday.  This was counterintuitive at first glance because the bond market was in better shape this morning (something that usually connotes lower rates).  The issue was simply due to timing, however, as bonds lost quite a bit of ground yesterday and hadn't gained it back by this morning.

As the day progressed, that began to change--not at first, but eventually.  Bonds/rates took some solace in the weaker ADP Employment data out this morning, but then had an indecisive reaction to the important Non-Manufacturing Index from ISM, which came out right in line with forecasts. In a data-dependent environment, both reactions make sense.  

Ultimately, bonds improved enough for a majority of lenders to offer mid-day improvements, thus bringing today's average 30yr fixed rate just slightly below yesterday's. 

With economic data in mind, today's reports pale in comparison to the big jobs report that comes out on Friday morning.  If it is as weak as today's ADP data, rates could continue to move lower.  If it sings a different tune, we could be right back to multi-decade highs.