Mortgage rates continued their frustrating, and somewhat puzzling, rise today, with the average lender approaching its highest level since the end of May.
While rising interest rates are always frustrating for the housing and mortgage market and for prospective borrowers, ups and downs are a part of life — in other words, it's completely normal to have good and bad interest rate days.
What is less common is that counterintuitive interest rate movements do occur from time to time. In other words, a sudden drop or rise in interest rates can usually be linked to one or more root causes that have had a similar effect in the past.
But this time, economic data from the past two days suggests downward pressure on interest rates. This is notable for two reasons: economic data is a reliable source of guidance, and more importantly, interest rates have not been subject to any downward pressure whatsoever over the past two days.
There are several ways to explain this paradox, but at the moment, most of the conversation involves speculation about the political impact on interest rates after last week's presidential debate. Connecting the dots from these conclusions to market movements is a fairly complex task and relies on several assumptions that cannot be predicted with a high degree of certainty. So, if this story continues to cause problems for interest rates, we will be digging deeper. For now, just be aware that it could be a source of counterintuitive pressure, but one that should still be countered by upcoming major economic reports.