Mortgage markets rallied for most of last week, but ended Friday on a sour note.
After touching their lowest levels since Memorial Day, mortgage rates spiked to close out the week.
Despite pricing getting worse by 1/4 percent Friday afternoon, however, mortgage rates still managed to fall for the second consecutive week.
There were two main storylines last week on Wall Street. The first was data-driven.
After several months of better-than-expected results, the September Non-Farm Payrolls report fell well short of expectations.
According to the government, another quarter-million jobs were lost last month, raising the 12-month tally to 5.75 million. Additionally, consumer confidence figures dropped.
The stories are related and it brings us to the second storyline. Without job growth, some analysts are openly wondering how the economy will ever start to expand. Especially with the Holiday Shopping season getting underway.
The negative vibes were enough to shake off an overwhelmingly positive series of housing reports. Both Pending Home Sales and the Case-Shiller Index continue to gain.
This week, without much economic data set to release, look for market psychology to play an important role in the direction of mortgage rates. The last two times that mortgage rates fell to these levels, they quickly reversed.
All the pieces are in place for that to happen again.