Mortgage loan rates are heavily influenced by the secondary mortgage market where national investors, such as Fannie Mae or Freddie Mac, buy mortgage loan products from lenders.  

The best mortgage rates typically happen when the economy slows down because investors speculate the Federal Reserve will cut mortgage rates in the future to help the economy improve. 

When the news suggests that the economy is improving, mortgage investors speculate that the Federal Reserve will raise interest rates in the future to control economic growth and inflation. Lenders then have to charge higher mortgage loan rates in order to sell to their investors. 

Reports Indicating the Direction of Mortgage Rates:

Consumer Price Index - One of the most important indicators of inflation. Higher inflation means increasing home mortgage rates, lower inflation means decreasing home mortgage rates.

Employment Cost Index - Measures the change in wages, salaries and benefits. It is important because rising labor costs can force businesses to raise prices, which can increase rates.

Gross Domestic Product - Measures the nation's total economic output. Strong growth can cause demand to exceed the supply, allowing businesses to charge more, increasing rates.