Weekly Mortgage Rates Inch Up, Jobs Data Trickles In

The average rate on a 30-year fixed-rate mortgage rose nine basis points to 6.23% APR in the week ending Nov. 20, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

We finally have federal labor market data from September, after a multi-week delay due to the government shutdown. But it’s a little too late, and not tremendously useful — like that cousin who wanders in to “help” just as the last Thanksgiving dish hits the drying rack.

What’s more, October’s report was canceled and November’s report will be delayed a week and a half, now scheduled for release on Dec. 16. That means Federal Reserve policymakers will have limited jobs data to review when they meet Dec. 9–10.

In the absence of certainty, mortgage markets are acting like the Fed won’t cut rates, so average rates are heading back up this week.

September’s jobs report is from a pre-shutdown economy, making its information somewhat less relevant now. And as far as Fed rate cuts are concerned, the most important numbers sort of cancel each other out. Employers added 119,000 jobs in September, higher than expected — but unemployment ticked up slightly to 4.4%.

The Federal Reserve doesn’t set mortgage rates, but its central bankers do try to make sure the economy doesn’t dry out from either high inflation or unemployment. Mortgage rates tend to shift in anticipation of the Fed’s next move: Rates might go lower if a cut to the federal funds rate appears likely, and higher if it doesn’t.

Some forecasters still see hope for the Fed to make a 25-basis-point cut in December. In a speech to economists this week, Fed governor Christopher Waller threw us a morsel saying he’s in favor of it. But not everyone agrees that a cut is the right move.

Following mixed signals in the September jobs report, we’ve seen more investors betting that central bankers will choose to keep the federal funds rate unchanged. And no Fed cut means higher mortgage rates are likely to follow.

Fed rate cuts are like salt in a turkey brine — too much or too little can throw the whole thing off balance. And just like your brother-in-law defending his secret recipe, everyone has an opinion on the right way to go about it.

Meanwhile, another data set rolled in this week reminding us of what we already know: When mortgage rates go down, more people buy houses.

Sales of existing homes went up 1.2% month-over-month in October, reports the National Association of Realtors. Home sales typically slow down as winter approaches, but with the 30-year fixed rate averaging 6.13% for the month of October, it’s no surprise some folks jumped at the chance to snag a lower rate — nearly 30 basis points lower than September’s average, to be exact. Buyers or refinancers who got especially lucky may have even locked in a mortgage rate below 6%.

Another positive sign is more homes for sale compared to last year. October saw a 10.9% year-over-year increase in total housing inventory, reports the NAR.

But despite those gains, the housing market is still experiencing a massive shortage of supply, says NAR chief economist Lawrence Yun. At a press conference Thursday, he said the market needs about 300,000 more homes to get inventory back to pre-COVID levels.

Between supply shortages and the steep cost of buying — the median sales price for existing homes rose to $415,200 in October — things are still tough out there for the average buyer.