rewrite this title Weekly Mortgage Rates Rise on the Heels of Promising Labor Data – NerdWallet

Mortgage rates fell for three straight weeks in the lead-up to the Federal Reserve’s Oct. 28-29 meeting, but now APRs have begun to reverse course.

As new employment data shows a strengthening labor market, the average rate on a 30-year fixed-rate mortgage rose 17 basis points to 6.18% APR in the week ending Nov. 6, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.

The Fed’s decision to lower the federal funds rate last week was widely expected by the time the announcement came, with several members of the Federal Open Market Committee publicly voicing their support for a cut.

Mortgage rates fell ahead of the meeting in anticipation of the Fed’s move, but now rates are reflecting conflicting ideas about what central bankers might do in December.

During a Fed meeting, central bankers have three possible moves:

Central bankers’ October vote was largely about boosting the labor market, which had shown signs of being in trouble before the government shutdown.

Now, new data from payroll solutions provider ADP released on Nov. 5 showed that employment somewhat rebounded last month, with private employers adding 42,000 jobs.

“Private employers added jobs in October for the first time since July, but hiring was modest relative to what we reported earlier this year,” said Nela Richardson, chief economist at ADP, in a press release following the report.

This modest rebound means the Fed may no longer see unemployment as the most pressing threat to the economy (read: they may stop cutting rates) and focus on inflation instead.

Despite assurances from President Trump that “we have no inflation,” a statement from the Treasury Borrowing Advisory Committee released on Nov. 3 indicates that inflation is still above the Fed’s target 2%.

This statement also said that unemployment doesn’t currently pose a major threat to the economy. “Indeed, labor markets appear to remain in balance as labor demand has softened with easing supply.”

There’s a good chance mortgage rates will continue rising, but we still have weeks to go until the next time the Fed will make a decision about the federal funds rate.

At the very least, it’s not looking like mortgage rates will return to the lows we saw in the days leading up to that October meeting, unless we get similar assurances of another cut before the December meeting.

That’s unlikely, since immediately after last week’s meeting, Fed chair Jerome Powell noted in his press conference that a December cut was not a sure thing. And again, if the Fed does want to prioritize inflation over employment growth, they won’t cut.