GREAT: 2022 Jobs Growth -- NOT GREAT: Mortgage Rates 1% Higher

Mortgage Rates Almost 4% After January 2022 Jobs Report - The Basis Point - Mortgage News Daily

In recent months, higher inflation has been a key driver of higher mortgage rates. Today, strong January jobs growth pushed rates even higher. Now 30yr rates are around 3.875%, almost a full 1% higher than near-3% rates in late-December. On a $400,000 loan, a .875% higher rate means a $195 higher payment (from $1686 to $1881).

Inflation — which is now 7% — erodes the future returns a bond would pay to investors. So investors sell bonds when inflation rises, which pushes mortgage rates higher. And rates also rise when U.S. jobs are better than expected because it implies a hot economy and potentially more inflation. That’s why rates spiked today when January jobs growth posted 467k new jobs, which was much higher than the 150k new jobs the market was expecting.

See below for more from Matt Graham at Mortgage News Daily (MND) on the market technicals. And please hit me with questions.

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– Mortgage Rates Leap Toward 4%, Highest Since Oct 2019 (MND)