Mortgage Rates Roughly Unchanged Today, But Probably Not Tomorrow

If you're reading this on Thursday, December 7th, it is the day before the big jobs report--the one that has all the potential in the world to cause huge reactions for interest rates.  It's not that lenders are watching the economic data and then guessing at how to adjust their rates in response.  Lenders are watching the bond market to determine the true value of the loans they originate and the bond market is watching the economic data!

Bond traders will be the first to tell you, if there is one monthly economic report with the most consistent track record of inspiring volatility for bonds/rates, this is it.  This particular installment is more interesting than normal given the transition that's been taking place in terms of other economic data and the Federal Reserve's assessment of the economy.

In not so many words, the economy is coming off the boil and even the Fed has been willing to acknowledge that.  But the Fed is also pragmatic, saying that we don't have enough data to confirm that the corner toward lower rates has officially been turned.  Bottom line: tomorrow's jobs report provides another important step in that confirmation process.  If it's much stronger than expected, rates will likely bounce back up.  If it's weaker than expected, rates should continue lower (or hold their recently achieved low ground, at the very least).

As for today, it was forgettable in terms of rate movement, but still quite nice in the sense that the average lender remained in line with the lowest levels in more than 4 months.