Weekly Mortgage Market Update: Mortgage Rates Moved a Bit Higher This Week
Current mortgage rates moved modestly higher this week, even as they remained near the lowest levels seen since early 2023. The shift did not come from a single headline. It came from a steady drumbeat of economic data, Treasury supply, and shifting expectations around inflation and growth. Mortgage-backed securities felt pressure as investors recalibrated risk following stronger economic signals and heavy bond issuance.
For borrowers across Raleigh and the Triangle, this week highlighted an important truth. Rates respond to momentum, not headlines alone.
Mortgage Rates Rose Slightly, but the Bigger Trend Still Matters
Looking only at the past five trading days, mortgage rates edged higher. Zooming out, pricing remains favorable compared to most of the past two years. This distinction matters because widely reported weekly surveys often miss short-term volatility. Daily rate sheets reflected upward pressure tied to Treasury yields and auction results, not a breakdown in the broader rate environment.
Mortgage pricing continues to benefit from strong demand for mortgage-backed securities, even as the broader bond market shows signs of strain. That dynamic helped limit the upside in rates this week.
Inflation Data Sent Mixed Signals to Bond Markets
Tuesday’s CPI report shaped much of the week’s tone.
Core CPI for December rose 0.2 percent, below expectations. Year-over-year core inflation held at 2.6 percent, reinforcing progress but not enough to ease all concerns. Headline CPI remained sticky at 2.7 percent year-over-year. These readings did not spark a bond rally. They also did not derail mortgage pricing.
Later in the week, producer price data added complexity. Core PPI year-over-year printed at 3.0 percent, higher than forecasted. This reinforced the idea that inflation pressure still exists within supply chains, even as consumer inflation cools.
For mortgage-backed securities, inflation data like this tends to cap gains rather than cause sharp selloffs. That pattern held this week.
Labor Market Strength Pressured Mortgage Bonds
Labor data leaned stronger than bond investors hoped.
Jobless claims fell to 198,000, well below expectations. Continued claims also declined. These readings pointed to a labor market that remains tight. Strong employment data often weighs on mortgage rates because it supports consumer spending and wage growth.
ADP employment change showed modest gains earlier in the week, while business optimism and manufacturing surveys improved. The Philly Fed Index surged into positive territory after months of contraction. The New York Fed manufacturing survey also surprised to the upside.
These reports added upward pressure to Treasury yields and limited the ability of mortgage-backed securities to rally.
Retail Sales and Housing Data Added to the Rate Headwinds
Retail sales increased 0.6 percent in November, beating forecasts. The control group, which feeds directly into GDP calculations, also met expectations. Strong consumer spending reinforces economic resilience. That environment challenges bonds.
Housing data offered a counterbalance, but not enough to reverse the trend. Existing home sales rose to 4.35 million units, showing demand remains intact even at higher price points. The NAHB Housing Market Index remained depressed at 37, reflecting ongoing affordability challenges and builder caution.
Mortgage application data from the MBA showed a sharp increase in both purchase and refinance activity. Purchases climbed to 184.6. Refinance volume surged above 1,300. Borrowers responded quickly to recent rate improvements, which helped support mortgage-backed securities on a technical level.
Treasury Auctions Were a Key Driver This Week
Bond supply mattered.
The 3-year, 10-year, and 30-year Treasury auctions set the tone for long-term yields. Demand was mixed, with weaker interest in longer maturities. The 30-year bond auction cleared at a higher yield than the prior auction, pushing long-term rates upward.
When Treasury yields rise, mortgage-backed securities face pricing pressure, and this week followed that playbook. Mortgage rates tracked higher alongside the 10-year yield, even as MBS spreads remained relatively stable.
Why Current Mortgage Rates Moved Higher This Week
Several forces worked together.
- Strong labor market data reduced expectations for near-term easing
- Firm retail sales supported economic growth narratives
- Heavy Treasury issuance pushed yields higher
- Inflation progress slowed but did not reverse
- Mortgage demand stayed strong, limiting damage to MBS pricing
- The result was a controlled move higher in mortgage rates, not a breakout.
What to Watch Next Week and Why It Matters
Markets are closed on Monday for Martin Luther King Jr. Day, compressing trading into a shorter week. That often increases volatility.
Key reports and events include:
- ADP Employment Change: A strong print would pressure mortgage bonds. A weak reading would support them.
- Construction Spending: Signals momentum in housing and infrastructure. Strong data favors higher yields.
- 20-Year Treasury Auction: Demand will influence pricing of intermediate rates.
- 10-Year Treasury Auction: This is the benchmark that most directly impacts mortgage rates.
With no major inflation releases next week, rate movement will likely hinge on labor data and Treasury demand.
What This Means for Raleigh Area Homebuyers
For buyers and homeowners across Raleigh, Cary, Apex, Durham, and Wake Forest, the takeaway is clear. Current mortgage rates remain attractive compared to recent history, but volatility has returned. Short-term movements reflect economic strength, not a shift back to high-rate conditions.
Timing, loan structure, and local expertise matter more than headline rates. Certified Home Loans works with borrowers across the Triangle to navigate rate changes with confidence. Whether you are exploring a Conventional loan, FHA financing, VA benefits, or a Jumbo mortgage, our team focuses on strategy, speed, and clarity.
Markets change weekly. Your mortgage plan should stay ahead of them.
