Rates go up - Rates go down

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Here are the six main factors that affect the interest rate on your mortgage

1. Economic data

Non-farm payrolls - higher than expected

Unemployment goes down - Better than expected economic data

Jobs data stagnant or in decline

Manufacturing stagnant or slowing

Housing weaker than expected

2. Geopolitics

China’s GDP improves

Middle East tensions ease

European economy sinks

Conflicts or acts of terror

3. Inflationary pressure

Higher / Lower consumer prices

Higher / Lower wholesale prices

Higher / Lower Hourly earnings

4. Stock market

Stock market is on the rise

Stocks in decline

5. Global events

A serene landscape around the globe with little catastrophic weather or events

Hurricanes, typhoons, tsunamis and earthquakes

6. The Federal Reserve

Mortgage rates fluctuate when the market reacts to economic announcements and stocks and bonds move, but it’s impossible to accurately predict short-term interest rate changes. Generally, for better or worse, interest rates go down when the market reacts to negative economic news, while rates increase as a response to positive forecasts.

Two of the three key drivers of the Real House Price Index (RHPI), nominal house prices and mortgage rates, dragged affordability lower in June. The 30-year, fixed mortgage rate increased by 0.3 percentage points and nominal house prices accelerated by 0.8 percent compared with May. While household income increased by 0.4 percent, it was not enough to offset the affordability-dampening impact from higher mortgage rates and prices. Consumer house-buying power declined by nearly $9,000 compared with May and remains $32,000 lower than one year ago. The outlook for house-buying power is heavily dependent on the path for mortgage rates, and that path is highly uncertain.

First American Blog • August 28, 2023

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Moriah Costa • September 22, 2023

Federal Reserve pauses rate hikes as inflation slows down. It's the second time this year the Fed left the key interest rate unchanged after seeing signs of inflation cooling off following 40-year highs.

By Marley Jay • September 20, 2023

Mortgage-Rate Buydowns by Homebuilders Are Now All the Rage to Prop Up Sales, Lowering Effective House Prices in a Big Way, but Don’t Get Picked Up by House Price Data

by Wolf Richter • September 10, 2023

A company in Mexico called EcoDomum (which translates to “EcoHome”) has developed a process to turn plastic waste into surfacing materials for exterior walls and roofing as well as interior walls. The company is reportedly able to turn more than 5 tons of plastic waste into usable building materials per day. This material can be used to build the basic structure of a small house for less than $3,000 (U.S.)