September 17, 2021

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Mortgage News

Mortgage Rates Move Up From Long-Term Lows

Mortgage rates reached its best value in 6 months yesterday, but has moved higher after a strong report on the services sector today.

The economy is one of the most important factors driving interest rates. Hence, some of the most relevant economic reports have been causing daily volatility for a long time. Today’s ISM Non-Manufacturing Index is one of the most important reports. By getting out a lot of stronger than expected, it indicated that the economy was nearing a level that would cause the Fed to change its interest-friendly policy. Bonds responded with lower prices and higher yields (also known as “interest rates”).

Of course we’re only talking about only one Economic report. A few hours earlier, another important report, ADP Employment, was largely overlooked. A few days ago, ISM’s own industry index indicated that economic growth is flattening out after the Covid situation.

The record of economic reports in the recent past is not as important as the future. Friday brings what is considered to be the most important Economic data for the bond market in a given month: the employment situation (official job report of the federal government). It alone doesn’t have the power to skyrocket in an environment where Covid stats are still rising, but it could certainly push things in that direction. Conversely, if it follows ADP’s lead and turns out weaker than expected, rates may as well revert to yesterday’s long-term lows.