165,000 jobs, triple the forecast, and mortgage rates didn't move. Why?

165,000 jobs, triple the forecast, and mortgage rates didn't move. Why?

Lender · Houston, TX · Member since 2026 · 124 posts · 26 votes

October payrolls came in at 165,000. The consensus was around 55,000, unemployment dropped to 4.1%, and August and September got revised up by a combined 84,000. On a normal day that sends mortgage rates up.

They didn't move. Mortgage News Daily's 30-year index ended Friday at 7.17%, the same as Thursday and down from 7.27% the week before. The 10-year Treasury spiked for a few minutes after the release and then closed near 4.86%.

The short end did react. The 2-year rose and the odds of a December Fed hike went from about 67% to about 77%. So the Fed's leaning tighter while the rate your buyer actually pays is drifting lower.

My read is that the bond market spent the week watching tech stocks, not payrolls. When AI and chip names sell off, money goes into Treasuries and holds long rates down. That's a real cushion, but the Fed isn't the one giving it to you, and it goes away if stocks settle down.

Here's what it does on a flip. A $264,000 loan at 7.17% runs about $1,787 a month, against $1,805 at last week's 7.27%. Hold the payment where it was and your exit buyer can carry about $2,600 more loan. A quarter point higher takes that buyer down to about $257,500. That's why I'm still pricing resales at today's rate and not counting on more.

Next test is October CPI on Tuesday. There won't be a yearly rate for all items this time because October 2025 prices weren't collected during the shutdown, so the monthly number is the one to watch.

I keep the full weekly write-up on my website, which you can find through my profile.

Question for the flippers here: when you price a resale that'll list three to six months from now, what rate do you assume your buyer gets? Today's, or something with a cushion built in?

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  • Realtor · Memphis, Shelby County · Member since 2026 · 348 posts · 123 votes
    2d

    Steve, great question — and the part that trips up a lot of flippers is assuming a strong jobs number has to move rates the same day. Rates tend to react more to what the market expects the Fed to do next, and to inflation, than to any single report, and a lot of that was already priced in before Friday. For pricing a resale three to six months out, I'd price to today's buyer, not to a rate cut that may or may not arrive — if the deal only works at a lower rate, the margin is too thin. Build in a buffer for extra days on market, and check in with your lender on what a buydown would actually cost versus a price cut. Hope for the lower rate, but underwrite like it isn't coming.

  • Noah WrightBusiness Member
    USA, Nationwide · Member since 2024 · 401 posts · 137 votes
    20h

    Steve, you already did the useful part by putting the quarter point case in dollars, and that's the number I'd build the resale around. Treat a quarter point worse as the floor, not the stress test. On your math that's an exit buyer going from $264,000 of loan to about $257,500, and if the flip still clears there, the listing date stops being a bet. The cushion you describe comes from money parking in Treasuries during a tech selloff, so it can leave on a stock rally that has nothing to do with payrolls or CPI. And the rate your buyer pays is usually the one they lock once they're under contract, not the one on the day you list. How solid a list price is comes down to how many rates it survives.

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