Nowadays, mortgage rates are notoriously unpredictable, however, housing economists expect them to edge up in the coming months. There are two items on this week’s economic calendar that could shape the future of mortgage rates.

The first bit of must-watch economic news comes Tuesday, which is when the Federal Housing Finance Agency unveils its conforming loan limits for 2022. It was considered that number is the line of demarcation between conforming loans and jumbo loans. As the housing market is on fire, the limit could near $1 million in high-cost areas such as coastal California and New York City.

The second piece of noteworthy news comes Friday, is when the U.S. Labor Department releases its jobs report for November. It is undeniable that unemployment soared into the double digits during the early months of the coronavirus pandemic, but the U.S. labor market has come back strong.

It was said that the unemployment rate for October stood at 4.6 percent. Players in the mortgage industry however, will watch closely for signs that the labor market is accelerating or sputtering.

It was also revealed that the Fed doesn’t directly dictate mortgage rates, and the calculus behind how much you pay for a home loan is complicated. However, here’s one easy rule of thumb: The 30-year fixed-rate mortgage closely tracks the 10-year Treasury yield. So, when that rate goes up, the popular 30-year fixed rate mortgage tends to do the same.

There are other factors that influenced the rates for fixed mortgages, such as supply and demand. When mortgage lenders have too much business, they raise rates to decrease demand too. And, when business is light, they tend to cut rates to attract more customers.

Such rates are ultimately set by the investors who buy your loan. Most U.S. mortgages are packaged as securities and resold to investors. Talk to your lender as they can offer you an interest rate that investors on the secondary market are willing to pay.

*source: https://www.bankrate.com/mortgages/whats-driving-mortgage-rates-the-week-of-nov-29/