If you’re watching mortgage rates, keep a close eye on the plethora of jobs data being released this week.
There are three key reports being released, including the all-important Employment Outlook on Thursday, too early due to the July 4 holiday.
We also got the job opening report on Tuesday and the ADP jobs report on Wednesday.
In other words, it will be jobs, jobs, jobs in mortgage rates and the broader market over the next few days.
At the same time, we still have vulnerabilities in the Middle East to consider and thanks to a strong ceasefire.
Employment Data Is Always a Big Part of Real Estate Estimates
As noted, it’s a big week of jobs data, narrower than usual due to the holiday-shortened week.
We have JOLTS (job openings) on Tuesday, ADP (autonomous payments) on Wednesday, and Bureau of Labor Statistics (non-farm payrolls) on Thursday.
And for good measure, the first useless requests too, which are released every week.
So it’s going to be a busy week for the workforce, which tends to be one of the biggest drivers of mortgage rates.
Another piece is inflation, which has also become more prominent recently, due to the increase in oil prices.
But because of the peace agreement that is said to exist there, the pressure has been lifted to some extent.
However, we have seen that the peace agreement was broken after a series of strikes over the weekend.
That could go on for who knows how long, keeping upward pressure on oil prices, gas prices, and mortgage rates.
Taken together, while the jobs data is important to credit levels as usual, it is already under additional pressure due to the Iran conflict.
Hot Job Data Can Act as a Bunch of Real Estate Estimates
As we grapple with this new wave of oil-driven inflation, anything better than expected in employment will not be good for credit ratings.
This means that cooler activity data may help prices, but may be limited in its impact against the backdrop of the Middle East situation.
Conversely, if job data comes in hotter than expected, you may experience an even worse impact than usual.
There is already much talk of a rate hike due to renewed inflation concerns.
And the hotter the job, the more forced the walk.
Basically it will reinforce the need to increase prices instead of cutting or pausing.
So those hoping to get low loan rates will want the data to come in at or below the agreement.
In the end, these reports may be more about avoiding surprises than anything else, basically letting investors take a collective breath.
Activity Data May Not Help Much, But It Can Hurt
Put another way, activity data may not help mortgage rates in any way, but it has the potential to hurt them more than usual.
You could argue that we are at a crossroads of sorts in terms of where the economy is headed. Are we hot again or do we continue to adapt?
Various reports this week may provide some details there, which could determine if prices continue to improve and bounce back in early 2026. Or worse.
Long story short, you want to finish this week unscathed in these data reports to avoid any inconvenience.
Then I hope that the situation in the Middle East continues to show signs of progress, thereby allowing inflationary concerns to recede.
Assuming all goes well, we can advance to the most recent (low) 30-year fixed gain, which was seen up 6.75% last month.
Since then it has dropped to around 6.50%, with the potential for further improvement if the aforementioned materializes as expected.
