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As fears surrounding the coronavirus heighten, mortgage rates fell this week. Despite positive economic data regarding the U.S. labor market, the continued spread of the virus outside of Wuhan, China, has investors tapping on the brakes. And as long as the uncertainty continues, economists do not think that positive economic data for the nation will have a huge effect on the stock market or interest rates. Instead, all eyes are on if the virus can be contained, and if it cannot be, where the world goes from there.
Mortgage rates fell this week, as fallout from the coronavirus outbreak continued to keep investors on their heels. This week showed that investors don’t feel the labor market poses a risk to the economy for now, but the coronavirus does.
Even encouraging economic data releases from the past seven days were no match for the persistent uncertainty surrounding the coronavirus, which continues to have a far greater influence on market behavior. Mortgage rates fell on Friday, despite the release of stronger-than-expected January jobs figures. Positive news on the labor market has had a lesser impact of late – largely due to its enduring strength – but a downward movement in rates following such a strong report was an eye-opener nevertheless.
Until uncertainty about the outbreak begins to recede, it’s likely that these unconventional reactions to data releases will persist. Much remains up in the air, but what’s certain is that the coronavirus will be the main driver of mortgage rate movements for the near future.
