The average didn’t quite make it back to the multidecade highs seen last week, but the average borrower would see little–if any–difference in today’s rate quotes.  This represents a fairly big jump up from Friday (which saw a nice correction down from Thursday’s highs). There are a few culprits–some specific, some general.  One specific culprit was the market’s reaction to the stop-gap bill that averted the government shutdown. Another specific and more obvious culprit was the stronger-than-expected outcome in today’s important manufacturing data.  Until that came out, the bond market (which dictates interest rates) looked poised to hold sideways with only moderate losses. Then there’s the general motivation that drones on in the background.  This is the “higher for longer” rate theme that has been hitting the bond market in waves over the past two years.  The most recent wave began 2 weeks ago with the Fed’s updated economic projections and rate outlook.  At the risk of redundancy, the Fed see’s rates staying “higher for longer.”  The bond market is increasingly forced to comply. There are several economic reports this week that are even more important than this morning’s manufacturing data.  If these are weaker than expected, rates could come back down.  If they’re stronger than expected, it would only reiterate the higher for longer narrative, almost certainly resulting in new multi-decade highs for mortgage rates. [thirtyyearmortgagerates]

Published On: October 2, 2023 / Categories: Mortgage News /