Mortgage rates increased this week, giving up some of the downward progress achieved over the past week.
Following the release of highly anticipated updates on inflation and monetary policy, which helped push mortgage rates down to their lowest point since the summer, this week’s quieter slate of data led investors to focus more on the broader economic landscape and set expectations as the new year approaches. Investors increasingly appear to be gauging the likelihood of a recession coming in the next year, and recent weakness in retail sales figures stoked some of these concerns. Treasury yields, and the mortgage rates that they tend to influence, were also pushed upward by a surprise monetary policy decision by the Bank of Japan, although it’s unclear how much of a lasting influence this will have.
Looking ahead, while it’s not uncommon for there to be some mild volatility at the end of the year, it’s likely that a more substantive move in mortgage rates won’t occur until early January, when the next read on a key inflation gauge is due.