Mortgage Rate Watch


    Mortgage Rates Nominally Higher Despite Bond Market Warning

    Mortgage rates rose gently today.  Most mortgage borrowers (and many mortgage professionals, for that matter) wouldn't be aware of slightly more alarming risks lurking underneath the surface.  Those risks involve the broader bond market from which mortgage-related bonds take their directional cues. 

    More simply put, if US Treasuries are improving, mortgage-backed bonds tend to improve as well.  The level of correlation varies though.  For nearly all of 2018, mortgages weren't improving as quickly as the most widely-used rate benchmark: 10yr Treasury yields.  That began to change recently--especially when 10yr yields began moving higher 3 weeks ago.  During that time, we've seen moderate moves higher in 10yr yields met with modest moves higher in mortgage rates.  Today was another one of those days.

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    Mortgage Rates Holding Ground But Volatility Could Increase

    Mortgage rates were technically steady today.  In fact, as of this writing, most lenders are offering slightly better terms compared to yesterday, but only by barely-detectable amounts.  The afternoon brought volatility in financial markets owing to trade-related headline.   That volatility isn't moving in a good direction for mortgage rates at the moment.  The takeaway is that, all other things being equal, lenders will be offering slightly weaker terms tomorrow morning, assuming they don't see quite enough weakness to adjust today's offerings with only a few hours left in the day.

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    Mortgage Rates Up Slightly, But Still in Great Shape

    Mortgage rates rose modestly today after spending the past 2 days moving sideways.  It was really yesterday's market weakness that caused today's move.  Mortgage rates are most directly affected by the trading of mortgage-backed securities (MBS).  When MBS are weaker, rates rise.  MBS were weaker throughout the day yesterday, but not by quite enough for lenders to go to the trouble of revising their rate sheets for the worse.  Instead, lenders simply waited until this morning to make the changes implied by the market.  This delayed reaction is common when the market movement on any given day isn't quite enough to justify lender reprices.

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    Mortgage Rates Unchanged Again as Markets Remain Cautious

    Mortgage rates were unchanged yet again today.  Given that rates are based on trading levels in underlying bond markets, it's no surprise to learn that bond investors have been hesitant to take things too far in either direction after pulling up slightly from the long-term lows achieved in early January.  The same could be said for the stock market, but replace early January with late December.

    For either side of the market, the biggest lingering uncertainty is the fate of the government shutdown.  The extent to which a shutdown resolution would move markets remains to be seen.  But at the very least, there's a risk that a resolution would push stocks and interest rates higher in unison--at least temporarily. 

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    Mortgage Rates Unchanged to Start the Week

    Mortgage rates held their ground today, keeping them in line with long-term lows achieved over the past 2 weeks.  To be fair, it was the previous week that offered the biggest benefits, but last week was no slouch.  Factoring out the first few days of January, it would have been the best week for mortgage rates since April 2018.

    It was a relatively quiet day for financial markets with the bonds that underlie mortgage rates trading in mostly the same territory as last week.  It remains to be seen how markets will react to the absence of the typical spread of economic data (much of which is on hold due to the government shutdown).  Beyond that, the shutdown could certainly begin to have an effect on the economy itself although it's hard to say how big of an effect that would be.  With this now being the longest shutdown ever, we're in uncharted territory as to the deleterious effects.

     

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    Mortgage Rates Lower Today, But Higher Than Last Week

    Mortgage rates improved today, breaking a 3-day streak with effectively no change.  This gets us part of the way back down to the long-term lows achieved at the end of last week.  At that time, the average lender was quoting conventional 30yr fixed rates that were roughly 5/8ths of a percentage point (0.625%) lower than the long-term highs seen at the beginning of November.  Rates then lurched higher by Tuesday of this week, eroding as much as a quarter of a point from some scenarios.  Today's gains restored about half of that weakness for a net improvement of 0.5% from November's highs.

     

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    Mortgage Rates Hold Steady Despite Market Weakness

    Mortgage rates were unchanged again today, despite moderate weakness in underlying bond markets.  Bonds are the primary ingredient used in determining mortgage rates, but the timing of market movement and lender preferences can result in discrepancies between the two.  For instance, if market weakness happens late enough in the trading day, many mortgage lenders will wait until the following day to do anything about it in terms of updating their rate sheet offerings.  Additionally, the bonds that dictate mortgage rates can trade slightly better or worse than the mainstream bond market (essentially, US Treasuries).

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    Mortgage Rates Level-Off After Rising For 3 Days

    Mortgage rates held steady today, after moving higher for the past 3 days.  Underlying market movement was slightly calmer than it has been in recent days.  Stocks were less eager to make new highs and bond yields (a key consideration for mortgage rates) actually moved slightly lower.  Taken together, this could be a sign that this week's small spike in mortgage rates may have run its course.

    On the other hand, the battlefield of market-related decision making is riddled with casualties from those who've jumped to such conclusions too early.  In other words, we can see some potentially promising developments in for rates when it comes to the way markets traded today, but it's too soon to plan on rates falling back to recent lows just yet.  

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    Mortgage Rates Highest in a Week

    Mortgage rates rose moderately for the 3rd day in a row today, bringing them to the highest levels since December 31st for the average lender.  In outright terms, this equates to an increase of an eighth of a percentage point (.125%) since the most recent lows last Thursday.

    While it's only 3 days of weakness in the mortgage market, the concern is that it could be part of a much larger market trend.  Stock prices and interest rates moved lower together for the better part of 2 months.  The drop was relatively extreme for stocks, and nothing to shake a stick at for rates.  The risk is that we're only in the early phase of a bigger correction.  While that would be great news for stock market investors, it would be less pleasant for those with a vested interest in lower mortgage rates.

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    Mortgage Rates Continue Rising From Long-Term Lows

    Mortgage rates were higher again today, extending a 2-day move from the lowest levels since early 2018.  The size and pace of the late 2018 improvements introduced the risk of a bounce even before last Friday's key events.  But after those events, the correction has been fairly swift.  Let's break those last two sentences down, as they contain a lot of implied information that isn't readily accessible without some background.

    Rates are based on trading in the bond market.  Like other markets, when momentum becomes lopsided, there's a risk of a correction.  Momentum had arguably become lopsided in favor of lower stocks prices and interest rates heading into last week.  That created one aspect of risk for low rates.

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    Mortgage Rates Erase Yesterday's Drop After Jobs Report

    Mortgage rates hit the lowest levels in nearly a year as of yesterday afternoon.  In general, they've had a one track mind for the better part of two months.  Today brought the first real challenge to the recent trend.  In plain terms, yesterday brought us the biggest single day drop in mortgage rates of this cycle and today completely erased it. 

    As the headline suggests, today's jobs report had quite a lot to do with the bounce.  Strong economic data is generally an enemy to low interest rates, but the impacts vary widely depending on the report.  The jobs report is universally considered to be the most important of the monthly economic data.  This one in particular was likely to be scrutinized due to recent policy comments from the Fed.  It ended up being one of the strongest examples in more than a decade, thus providing a clear signal for rates to move higher.

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    Mortgage Rates Lowest in Nearly a Year

    Mortgage rates have been plummeting, depending on your definition of the word.  To be sure, the past 2 months have no competition in nearly 3 years.  The past few days have been special in their own right.  Whereas there was cause for concern about the new year bringing a bounce for stock prices and mortgage rates, stocks haven't done much of anything in the context of their late-2018 volatility, and mortgage rates have dropped another eighth of a percentage point (or more, depending on the lender).

    There are now lenders quoting 30yr fixed rates as low as 4.375% on top tier scenarios with the average lender back to 4.5%. 

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    The Party is Still Going For Mortgage Rates

    Mortgage rates didn't have much to celebrate in 2018--at least not until the last few months.  But those last few months were quite nice!  Despite uncertainty heading into the new year, rates managed to drop again to kick things off--effectively keeping the New Year's party going. 

    The average lender is now down to the lowest rates since early 2018.  For some, that means April.  For others, it means February.  Either way, it's meaningfully lower compared to the recent highs.  For example, lenders are quoting rates that are roughly half a percentage point lower compared to early November.

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    Mortgage Rates End Year on Strong Note

    Mortgage rates moved lower again today--this time in a slightly more noticeable way.  More than anything, this was a reflection of last Friday's market movement, which lenders were hesitant to pass along on their rate sheet offerings ("market movement" + "lender-specific factors" = mortgage rates).    As of Friday, the average lender was offering the best rates since August.  As of today, we're seeing the best rates since April.  In other words, the year is ending with the best rates in 8 months.

    My comments from last Friday are still relevant:

    2 months ago, all hope seemed lost.  Rates were the highest in years and there were few reasons to expect the pain to subside, short of a massive meltdown 

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    Mortgage Rates End 2018 at 4-Month Lows

    Mortgage rates moved lower by an almost imperceptible amount today.  The improvement was enough to bring the average lender to the lowest levels since the end of August, 2018.  In other words, these are the best rates in 4 months. 

    2 months ago, all hope seemed lost.  Rates were the highest in years and there were few reasons to expect the pain to subside, short of a massive meltdown in stocks or a big picture shift in the economy.  As you're likely away, stocks indeed tanked heading into the 4th quarter.  And as I've mentioned many times since, that stock weakness was largely responsible for rates' ability to reclaim lost ground.

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