Economic data and mortgage rate movement go hand in hand.  A stronger economy puts upward pressure on rates.  A contracting economy helps rates move lower.  While this is far from the only source of inspiration, it's indirectly linked to other major sources of inspiration (like Fed policy).  Paradoxically, rates managed to move a bit lower today despite an exceptionally strong economic report.  What's up with that?

The Philadelphia Federal Reserve district publishes a highly regarded report on the manufacturing outlook each month (dubbed simply "The Philly Fed Survey").  It crushed expectations today.  True to expectations, the bond market (which underlies mortgage rate momentum most directly) weakened at first, thus suggesting higher rates.  But bonds quickly found their footing.  This likely had to do with the fact that last month's Philly Fed survey was almost equally as weak.  In other words, today's big beat mostly served to wash out last month's big miss.

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