Portland Mortgage Market Update — December 8, 2023

This week was jobs week! It seems odd to me that the market will react to reports that are so inaccurate. What I mean is whenever jobs reports are released (either by ADP or the Bureau of Labor Statistics) they are based on incomplete data. ADP or the BLS then extrapolates based on the data received and issues a report. THEN in subsequent reports they adjust the previous findings once the rest of the data trickles in. For instance in today's BLS report for November, they had to adjust the previous two-months of reports downward by 35K but otherwise came in pretty much in line with expectations of where jobs would be (although will surely be adjusted downward in future reports).

Rates pretty much took the info in stride. If the Jobs report underperformed it would have been a boon for interest rates. The 30 yr coupon has been bouncing between two technical levels for the past week; a 200-day moving average and a Fibonacci level. A weaker jobs report would have allowed rates to punch through these levels and improve further. A much stronger jobs report would have led to worse mortgage rates. Currently we are hovering in the low-mid 7's on a 30 yr fixed Conventional loan, and in the in the mid-6's going FHA!

Next week is Fed Week and Inflation week. The CPI drops on Tuesday, and the PPI on Wednesday (which is also the same day the Fed meeting adjourns with their decision on their interest rate). It is highly unlikely they will move their rate next week, but we are still rooting for tamer inflation numbers to gauge when they will start cutting their rate next year.