What Moves Mortgage Rates?
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One of the most common questions that people ask me is "What moves mortgage rates? What causes mortgage rates to go up or down?" The answer, unfortunately, is not exactly straightforward. The economy is a complex animal, and there are many factors that move mortgage rates.
Mortgage rates are influenced on a daily basis more by market perception than particular numbers or data. Rates can change daily, and sometimes even during the course of a day based on economic events that happen throughout the day. Generally speaking, if commentary by key government agencies or economic data that is released indicates a weaker economy, mortgage rates will get better during that day. If commentary hints toward a strengthening economy, mortgage rates will get worse.
Here are a few of the most important economic indicators that are released each month:
Consumer Price Index- A measure of the average price level paid by consumers on over 200 goods and services.
Retail Sales- A measure of total receipts of retail stores, adjusted for seasonal variations.
Chicago PMI- Opinion surveys of over 200 Chicago purchasing managers regarding the manufacturing industry.
Employment Report- Measures of jobless claims, continuing unemployment claims, hourly earnings, and job creation.
So why do these indicators move mortgage rates?
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