Mortgage Rates Fell Slightly This Week, But No Major Relief Is Expected

Mortgage rates decreased this week as a cooler-than-expected July jobs report prompted a modest retreat in rates from recent highs. The latest employment report showed that hiring slowed in July and annual wage growth has declined by a full percentage point from a year ago. The recent increase in labor productivity also means inflation is likely to moderate further – meaning mortgage rates could finally find their ceiling.

However, plans by the US Treasury to increase the size of its auctions have the potential to push rates up, since an increase in the supply of US treasury securities pushes longer term yields – which mortgage rates tend to follow – higher. This week’s consumer price index and producer price index data releases are also expected to cause large swings in mortgage rates.