In the last week of October 2018, mortgage rates held firm despite turbulence in the equity market. Volatility in U.S. and China trade relations, along with concerns about the U.S. economy's ability to stay strong as interest rates rise sent stocks down.
Treasury rates normally move with mortgage rates, and such market anxiety typically exerts downward pressure on mortgage rates, but the reaction in this case was relatively toned down, signaling greater possibility of future rate hikes, writes Zillow director of economic research Aaron Terrazas. "Continued uncertainty on Wall Street may prompt a significant retreat, but for now rates are holding firm very near to their highest levels in seven years."
Disappointing housing data headlined what was a slow week in economic data releases, with rates reacting only slightly, as a result. However, things pick up on Friday with the release of Q3 advanced GDP data. A strong release could be another signal for mortgage rates to return to their upward trajectory.
