Mortgage rates are based on bonds and the bond market is coming off an important and largely successful week.  It was important because it was the first week since the November 14th Consumer Price Index (a key inflation report that often causes movement in rates) that brought other economic data of similar significance.  It was successful because the balance of that data was not economically strong enough to do much damage to the recent winning streak.

In other words, rates have fallen significantly from their decades-high ceiling in October due to softer economic data and we have yet to see an economic report that argues against that softening in an overly convincing way.  To be sure, last week's jobs report was very good relative to historic norms, but not good enough to derail the narrative of a normalizing economy.

Jobs aside, inflation is the biggest nemesis for bonds/rates and the Consumer Price Index (CPI) is the biggest monthly revelation on the state of inflation.  That's precisely why tomorrow's volatility potential is higher.  The latest CPI will be released at 8:30am.  If it's higher than forecast, rates should rise.  If it's lower, rates should fall.  If it comes in very far from forecasts, the movement could be quite abrupt.

As for today specifically, it ended up being mostly a placeholder ahead of CPI.  The average mortgage lender was offering rates that were just a hair higher than Friday's, but several lenders made friendly adjustments in the afternoon in response to improvements in the bond market.