Investors show bonds the love for Valentine's Day

Happy Friday from Local Mortgage!

A good week for mortgage rates as we finally broke through 5.875% and moved all the way down to 5.625% for our very best 30-year fixed conventional scenario.

This week was packed with major economic reports centered around labor markets and inflation. Surprisingly, not all of the data pointed towards lower rates, but investors showed bonds the love this week, pushing us to a new 3-year low for mortgage rates.

Wednesday’s key employment report was better than expected as we added 130k jobs in January, well above the consensus forecast of 70k, and the unemployment rate fell to 4.3%. However, the market reaction to this stronger than expected data was somewhat muted.

Friday’s CPI report came in just a bit below forecasts, with core CPI down to 2.5% reaching the lowest level since 2021. Shelter components of the report, albeit still high, have continued to come down over the past few readings.

Next week will be a short week with markets closed Monday for President’s Day. It will be interesting to see if this week’s rally will continue. Friday will be a big day for economic data with the fourth quarter GDP report and the PCE Index scheduled for release.

Hope everyone has a great weekend and thank you for reading.