For the week of January 2, 2023

Recap of last week: Rates slightly higher
Average mortgage rates crept a bit higher during the holiday shortened week last week, mainly due to conditions caused by low trading volume in the markets. Unfortunately we have seen rates move higher now for two weeks in a row, although not by much.

Mortgage Rate Forecast: Rates could improve
This week we could see mortgage rates improve a bit, hopefully recovering some from the increases we saw during the last couple of weeks. All eyes will be on Friday's jobs data, and Friday could be a volatile day for rates.

What's affecting rates this week:
- Economic data: There isn't much data to worry about this week, but Friday's jobs data has the potential to have a big effect on rates. Markets will be looking for signs of the labor market weakening, and signs of strong wage growth or low unemployment could pressure mortgage rates. This is the last jobs report before the next Fed meeting, so markets will be watching it closely.
- The Fed: Current mortgage rates are based on the speculation that the Fed policy rate will peak at 4.75% by March. If markets start to believe that the Fed will raise the policy rate higher, based on strong labor data and other strong economic data, it will pressure mortgage rates higher.