Author: Eric BernsteinPublished:
Mortgage rates went on a wild ride last week. Thankfully, the job data last week showed a VERY different picture than the jobs data we saw from last month AND inflation crept closer to the 2% target.
So why did rates inch higher? It seems the bond market and Wall Street have already predicted the winner of the 2024 election, but was it premature?
The average rate on a 30-year fixed rate conventional loan kept creeping up to 6.756% (up from 6.68% last week)! Sign up for our weekly Friday rate texts to see all the great options LendFriend provides to homebuyers!
Trump 2024?
That's what the bond market has been predicting (until today) and it's contributed in large part to the spike we've seen in mortgage rates. Why? Concerns over a growing deficit and economic fallout/inflation following Trump's tariffs plans.
The non-profit, non-partisan Committee for a Responsible Federal Budget has said Trump's economic plans will, at the mid-point, increase U.S. debt by around $7.5 trillion, more than double their assessment of those from Vice President Harris.
Any whiff of inflation is going to set off alarms and whether right or wrong, the market believes that Trump is the more likely candidate to cause inflation.
That all changed over the weekend as a new poll out of Iowa and online betting market like Kalshi , and Polymarket show a resurgence of Kamala's chances to win the election at the last minute. Adding confusion to where mortgage rates are heading. As a result, we're seeing rates fall this morning from where they were on Friday (as of 9AM CT) - which is great news for anyone who went under contract this week.
Of course, it's a MAJOR election week and anything can change at the drop of a hat. A big drop in rates one day can turn into a big increase the next. Volatility is the theme of the week!
Note: This publication is not endorsing or predicting the next president. Just reporting the news. Jeff Bezos wrote an interesting OpEd on media bias and The ReCap strives to maintain an unbiased perception!
We're ALMOST at the 2% goal!!!!
The personal consumption expenditure (PCE) index for September came in at just 2.1% year over year! PCE is the primary gauge for the Fed's measure of inflation readings. However, core PCE (excluding food and energy) came in at 2.7% YoY and increased 0.3% on a monthly basis. The annual rate was 0.1 percentage point higher than forecast but the same as in August, but the housing component of the PCE actually fell quite a bit!
Overall its a win for homebuyers and its nice to see that inflation is still under control, for the time being at least.
Jobs Data Pulls A 180
Everyone was ready to talk about a resurgence of the labor market last month when September numbers came out, but weekly readers of The ReCap knew better.
Of course, not only did September numbers supremely disappoint, but there were tons of revisions to the "stellar" numbers we saw last month. Here's a quick recap:
US job openings fell to a 3.5 year low. Job openings, a measure of labor demand, dropped by 428k to 7.443 million (vs 8M expected) by the last day of September, the lowest level since January 2021 - very dramatic for a 1 month drop. Layoffs rose 165,000 to 1.833 million August numbers were also revised down by 179k!
On the other hand, private payrolls measured by ADP showed non-governmental employers added 233,000 jobs in October more than double expectations, Remember, ADP’s estimates are derived from the number of workers on payroll through its systems, meaning those workers are counted as employed whether or not they received a paycheck during the reference week.
Finally, and the biggest disappointment, the Employment Report increased by just 12k for the month, way below the 100k estimate. Analysts were quick to point blame at labor market damage caused by hurricanes and the Boeing strike - but even accounting for those issues these numbers are suboptimal. To add fuel to the fire, August was cut to just a gain of 78k jobs (initially a 142k gain) while September’s initial estimate came down to 223k (down from 254k). Together, the net revisions lowered previously reported job creation totals by an additional 112k! It's interesting that these revisions are always lower and never higher! I wonder where the October numbers will actually shake out... will they end up negative??
WILL WE SEE A 2ND RATE CUT THIS WEEK?
Yes (according to the analysts)
But, remember - mortgage rates have only gone UP since the last rate cut. I'm more interested in what Powell has to say on the podium about future rate cuts and the state of the economy.
So why did rates inch higher? It seems the bond market and Wall Street have already predicted the winner of the 2024 election, but was it premature?
The average rate on a 30-year fixed rate conventional loan kept creeping up to 6.756% (up from 6.68% last week)! Sign up for our weekly Friday rate texts to see all the great options LendFriend provides to homebuyers!
Trump 2024?
That's what the bond market has been predicting (until today) and it's contributed in large part to the spike we've seen in mortgage rates. Why? Concerns over a growing deficit and economic fallout/inflation following Trump's tariffs plans.
The non-profit, non-partisan Committee for a Responsible Federal Budget has said Trump's economic plans will, at the mid-point, increase U.S. debt by around $7.5 trillion, more than double their assessment of those from Vice President Harris.
Any whiff of inflation is going to set off alarms and whether right or wrong, the market believes that Trump is the more likely candidate to cause inflation.
That all changed over the weekend as a new poll out of Iowa and online betting market like Kalshi , and Polymarket show a resurgence of Kamala's chances to win the election at the last minute. Adding confusion to where mortgage rates are heading. As a result, we're seeing rates fall this morning from where they were on Friday (as of 9AM CT) - which is great news for anyone who went under contract this week.
Of course, it's a MAJOR election week and anything can change at the drop of a hat. A big drop in rates one day can turn into a big increase the next. Volatility is the theme of the week!
Note: This publication is not endorsing or predicting the next president. Just reporting the news. Jeff Bezos wrote an interesting OpEd on media bias and The ReCap strives to maintain an unbiased perception!
We're ALMOST at the 2% goal!!!!
The personal consumption expenditure (PCE) index for September came in at just 2.1% year over year! PCE is the primary gauge for the Fed's measure of inflation readings. However, core PCE (excluding food and energy) came in at 2.7% YoY and increased 0.3% on a monthly basis. The annual rate was 0.1 percentage point higher than forecast but the same as in August, but the housing component of the PCE actually fell quite a bit!
Overall its a win for homebuyers and its nice to see that inflation is still under control, for the time being at least.
Jobs Data Pulls A 180
Everyone was ready to talk about a resurgence of the labor market last month when September numbers came out, but weekly readers of The ReCap knew better.
Of course, not only did September numbers supremely disappoint, but there were tons of revisions to the "stellar" numbers we saw last month. Here's a quick recap:
US job openings fell to a 3.5 year low. Job openings, a measure of labor demand, dropped by 428k to 7.443 million (vs 8M expected) by the last day of September, the lowest level since January 2021 - very dramatic for a 1 month drop. Layoffs rose 165,000 to 1.833 million August numbers were also revised down by 179k!
On the other hand, private payrolls measured by ADP showed non-governmental employers added 233,000 jobs in October more than double expectations, Remember, ADP’s estimates are derived from the number of workers on payroll through its systems, meaning those workers are counted as employed whether or not they received a paycheck during the reference week.
Finally, and the biggest disappointment, the Employment Report increased by just 12k for the month, way below the 100k estimate. Analysts were quick to point blame at labor market damage caused by hurricanes and the Boeing strike - but even accounting for those issues these numbers are suboptimal. To add fuel to the fire, August was cut to just a gain of 78k jobs (initially a 142k gain) while September’s initial estimate came down to 223k (down from 254k). Together, the net revisions lowered previously reported job creation totals by an additional 112k! It's interesting that these revisions are always lower and never higher! I wonder where the October numbers will actually shake out... will they end up negative??
WILL WE SEE A 2ND RATE CUT THIS WEEK?
Yes (according to the analysts)
But, remember - mortgage rates have only gone UP since the last rate cut. I'm more interested in what Powell has to say on the podium about future rate cuts and the state of the economy.
Key reporting dates this week:
Mon, 11/11: Veteran's Day holiday, bond market closed
Tues, 11/12: NFIB optimism index, Fed Presidents speaking
Wed, 11/13: Consumer price index, Core CPI
Thurs, 11/14: Initial jobless claims, Producer price index, Core PPI
Fri, 11/15: U.S. retail sales, Import Price Index
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About the Author:
Eric Bernstein is the President and Co-Founder of LendFriend Mortgage, where he helps homebuyers make smarter, more confident decisions in today’s fast-moving housing market. With over a decade of experience guiding hundreds of clients—from first-time buyers to seasoned investors—Eric brings a mix of market insight, strategy, and personalized service to every mortgage transaction. Each week, Eric breaks down the housing and economic headlines that matter, giving readers a clear, no-fluff view of what’s happening and how it might impact their buying power.