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Navigating Mortgage Rate Trends: Finding Optimism Amidst Market Swings

If you’ve been keeping an eye on mortgage rates lately, you might have noticed some intriguing shifts. Last week, we might have witnessed a significant turning point in rates that left experts like me hopeful. Let’s break down the recent events and what we might expect in the near future.

Reading the Market Tea Leaves

For the past few weeks, the world of mortgage rates has been a roller coaster ride, with bond traders relentlessly pushing rates higher. However, amidst the turbulence, a glimmer of hope emerged in the form of a “Bullish Hammer” pattern. And guess what? The trading patterns have lent their support to this optimistic signal.

Look at the graph at the top of this blog post – that unassuming circle holds a secret. Squint a little (or maybe a lot!), and you’ll spot a resilient green hammer. Since that remarkable day, we’ve witnessed improvements, and things got an extra boost recently due to some unexpected news.

JOLTS in Our Favor

Ever heard of JOLTS? It stands for Job Openings and Labor Turnover Survey, and it’s a key economic indicator. Recently, the JOLTS data was released, revealing a surprising 8.82 million job openings, well below the forecasted 9.46 million. What might sound like mere numbers has intriguing implications – it suggests the economy might be contracting, a scenario that’s bond-friendly and ultimately leads to rate improvements.

Here’s the deal: remember that handy graph with the red and green candles? Each of those represents a day of trading. And in the world of mortgage rates, there’s an inverse relationship between yields and prices. The higher up those yields climb, the lower the rates go. So, it’s as simple as this – green signifies good news, while red, well, not so much.

What’s on the Horizon

The excitement doesn’t stop here, my fellow rate-watchers. Brace yourselves for an upcoming data bonanza that’s likely to have an impact on rates. We’re talking about the GDP and ADP numbers tomorrow, PCE on Thursday, and the highly anticipated Non-Farm Payrolls on Friday. If these upcoming releases continue to lean towards inflation-friendly figures, brace yourself for the possibility of even more rate improvements.

Closing Thoughts: Seeing the Silver Lining

As we look at the recent market trends, it’s clear that mortgage rates are anything but static. The “Bullish Hammer” pattern might just be the guiding light we need after weeks of ups and downs. With economic indicators like the JOLTS data hinting at a contracting economy, there’s room for optimism about rate improvements.

So, here’s the bottom line, dear readers – while the journey of mortgage rates might be unpredictable, understanding the signals and patterns can help you make informed decisions. Keep your eyes peeled for those signals or just come back here or call me for the latest info!

Published 8/29/23

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