December's Housing Starts was the first of this morning's two economic reports. The 8:30 AM ET release showed new home groundbreakings spiked 15.8% last month, exceeding expectations. However, the large increase is being attributed to multi-family starts (apartments). Single-family home data is usually more relevant to mortgage rates, which rose a much more modest 3.3%. This is partly why this report often has little impact on mortgage rates, like we are seeing this morning.
Next up was December's Industrial Production report at 9:15 AM ET that revealed a surprisingly strong 0.9% rise in output at U.S. factories, mines and utilities. Forecasts were calling for a much smaller increase, signaling strength in part of the manufacturing sector. Accordingly, we must label the data to be bad news for mortgage rates. Fortunately, this report isn't considered to be highly important to the markets.
Next week doesn't have any significantly important economic data like the past two weeks did. There are a few moderately relevant reports scheduled along with a Treasury auction midweek. The stock and bond markets will be closed Monday for the Martin Luther King Jr holiday, reopening for regular trading Tuesday morning. There isn't anything that is expected to affect mortgage pricing until Wednesday morning. Look for details on all of next week's activities in Sunday evening's weekly preview.
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