October and November rates were the highest in 7 years, then in December rates dropped to 2018 lows. That continued into the new year with the biggest single day drop of the cycle happening last Thursday. Then Friday’s strong job creation and income growth report — 312,000 jobs created vs. 176,000 expected, and hourly earnings up 3.2% year over year, the fastest pace since 2009 — erased Thursday’s gains.
Rates rise on stronger economic sentiment like this, and they rise especially fast when there’s a data surprise like Friday’s income growth. Why? Because rates are tied to bonds, higher wages lead to inflation, and inflation erodes future returns for bond investors.
All of this said, rates are still super low. So if you’re a homebuyer actively shopping right now, holding for lower rates is very risky. Let your property search be your driving force, not rates. You can control how you select your dream home, you can’t control what rate markets will do day to day. And it’s simple enough to refinance if rates drop after you close. Ask your lender to brief you on how this works.
Rate guru Matt Graham has full rate market details below, including where we may go from here. Go check it out, but don’t forget what I said above.