Calendar: What determines mortgage rates the week of Nov. 29 to Dec. 3, 2021

Mortgage rates are notoriously unpredictable, but housing economists expect them to rise slightly over the next few months. Two things on this week’s economic calendar could shape the future of mortgage rates.

This week’s first must-see economic news arrives on Tuesday, when the Federal Housing Finance Agency unveils its compliant loan limits for 2022. That number is the dividing line between compliant loans and jumbo loans. With the housing market on fire, the limit could reach nearly $ 1 million in high-cost areas such as coastal California and New York City.

A second noteworthy piece of news arrives Friday, when the US Department of Labor releases its employment report for November. Unemployment soared to double digits in the first months of the coronavirus pandemic, but the US labor market has come back in force.

The unemployment rate in October stood at 4.6%. Mortgage industry players will be watching closely for signs of an acceleration or slowdown in the labor market.

The Fed doesn’t directly dictate mortgage rates, and calculating how much you pay on a home loan is complicated. But here’s a simple rule of thumb: The 30-year fixed rate mortgage closely tracks the yield of the 10-year Treasury. When that rate rises, so does the popular 30-year fixed rate mortgage.

Fixed rate mortgage rates are influenced by other factors, such as supply and demand. When mortgage lenders have too much business, they raise rates to reduce demand. When business is light, they tend to cut rates to attract more customers.

The rates are ultimately set by the investors who buy your loan. Most US mortgages are packaged in the form of securities and resold to investors. Your lender offers you an interest rate that secondary market investors are willing to pay.

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