Mortgage Rate Watch


    Mortgage Rates Maintain Recent Lows

    Mortgage rates unexpectedly dropped to their lowest levels in more than a month as of last Friday.  That assertion is at odds with quite a few media reports that cited Freddie Mac's weekly survey data saying that rates were essentially unchanged from the previous week.  This occurred because Freddie's survey only captures the first few days of any given week and most of last week's improvement took place on Thursday and Friday.  As such, this week's Freddie surveys should reflect that nice drop in rates.

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    Mortgage Rates Lowest in a Month

    Mortgage rates hit their lowest levels of THE month yesterday, and the lowest levels in A month today.  It's a bit of a technicality, really.  As of yesterday, there were a few days in mid-to-late October that saw lower rates.  Today's drop means we'd need to go back to early October to see anything lower. 

    What's the significance of being at the lowest levels in a month?  None, really.  It's just really fun to be able to say such things in an environment where such things haven't been easily said for quite some time!  Perhaps more relevant and more tangible is the fact that we can say rates are nearly an eighth of a percentage point lower on the week, and that's a decent move regardless of the environment.

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    Lowest Mortgage Rates This Month!

    Mortgage rates hit their lowest levels of the month today!  Sure, that's only 10 business days for the mortgage world, but we'll take every little victory we can get these days.  Why is that?  Because "these days" have been pretty rough.  Exactly one week ago, rates were at their highest levels in nearly 8 years.

    The assertion about today's rates runs counter to quite a few news stories.  Major media outlets are reporting rates as being 'unchanged' this week.  That wasn't necessarily incorrect until today. In those cases, reporters are relying on Freddie Mac's weekly survey data.  The survey only collects responses from Monday through Wednesday and the results tend to over-represent Monday and Tuesday's rates on any given week.  Long story short, as of yesterday, it would have been fair to say rates were indeed unchanged this week.  Nearly all of the improvement happened today.

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    Afternoon Mortgage Rate Improvements For Most Lenders

    Mortgage rates began the day in roughly unchanged territory.  Some lenders were microscopically stronger or weaker compared to yesterday, but not enough to impact the average mortgage borrower.  For the first few hours of the day, it looked as if rates would stay unchanged or possibly move slightly higher.  That all changed when stocks began losing ground.

    It's always worth remembering (and this will be especially true when the next time it's proven) that there's no magic rule that says stock prices and interest rates must move in the same direction.  It is true that there are frequent examples of such correlation, but there are plenty of other examples where the correlation complete breaks down.  All that to say that stock losses helped rates today, but will not always necessarily help rates in the future.

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    Token Improvement For Mortgage Rates

    Mortgage rates improved by what could only be described as a token amount today.  In other words, we're not talking about any major changes.  In fact, mortgage rates themselves will be unchanged from Friday for almost any scenario.  As is so often the case, we can only measure the change in terms of "effective rates" (which take upfront costs into consideration).  In general, changes in mortgage rates are reserved for big market moves whereas upfront costs and effective rates allow for smaller changes in the overall cost of financing.

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    Mortgage Rates Steady Ahead of Holiday Weekend

    Mortgage rates were mixed today, depending on the lender.  Most lenders began the day in slightly worse shape compared to yesterday.  Bond markets improved enough by mid-day that many lenders were able to offer positive reprices (new, better rate sheets).  Lenders typically don't change mortgage rates more than once a day unless underlying markets have moved enough.  Lenders who repriced generally ended up slightly better off compared to yesterday.  The remainder were in worse shape.  On average, rates were unchanged.

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    Mortgage Rates Edge Back Up to Early 2011 Levels

    Mortgage rates moved back up today, leaving them right in line with the highest levels of the week.  These also happen to be the highest levels since early 2011, but let's not get bogged down in unfortunate details!  Rates will definitely move lower at some point in the future.  That's the way economic cycles work--and they always work eventually.  The big questions are twofold: how long will it take for fortunes to change and how high will rates go in the meantime?

    In terms of timing, we could be looking at anywhere from a few months to more than year before seeing a shift that's big enough to get excited about.  That said, there will still be pockets of positivity at times, even in a rising rate environment.  Whatever the case may be, the higher rates go, the closer we're getting to the end of the tunnel.  That doesn't make the tunnel any more pleasant, but perhaps knowing it will eventually end is enough to make it somewhat more bearable.

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    Mortgage Rates Edge Lower, But Don't Get Used to It

    Mortgage rates were slightly lower today.  Unfortunately, that may not be the case by tomorrow morning.  Underlying bond markets (which dictate rates) lost ground throughout the day.  If trading levels don't change by tomorrow morning, the average lender will be back up at the highest rates in 7+ years.  Many are close enough as it is.

    The key feature of the past 24 hours was the midterm elections.  Bonds improved when democrats won control of the house.  This was in line with the average prediction for how elections might impact rates.  That said, the fact that bonds have already fully erased that overnight move should let you know just how little the elections mattered in the bigger picture.  The longer-term headwinds for interest rates remain entrenched, and it will take a long time or a massive amount of drama for that trend to change.  Drama can come in the form of a shift in the economy or a much bigger stock sell-off than we saw in October.

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    Mortgage Rates Steady at Long Term Highs Ahead of Election

    Mortgage rates didn't move much today.  A few lenders were microscopically stronger or weaker, and the average lender was perfectly unchanged.  That's fairly decent news, considering underlying bond markets suggested higher rates by the end of the day.  That said, this could easily be one of those situations where lenders are heading into tomorrow morning with a bit if an upward adjustment to make to rates (reason being: they need to see a certain amount of movement in any given day before "repricing."  Otherwise, they'll just wait for the following morning). 

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    Mortgage Rates Higher Still, Despite Calmer Market

    Mortgage rates continued pushing up to new 7-year highs today, even if only by a small margin.  This is notable because the underlying bond market (the primary factor in mortgage rate movement) suggested that rates should have fallen today.  The issue is that bond markets were so weak on Friday that mortgage lenders didn't have a chance to fully adjust their rate sheets to reflect the losses.  As such, there were still some losses to deal with this morning, and today's modest bond market improvement wasn't quite enough to offset them.  In other words, we began the day with enough of a disadvantage from Friday that it couldn't be overcome.

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    Mortgage Rates Rise Sharply to Fresh 7-Year Highs

    Mortgage rates had a bad week and an especially bad day following a much stronger-than-expected jobs report.  The Employment Situation (the most important piece of labor market data and arguably the most important economic report as far as interest rates are concerned) showed the highest pace of wage growth since before the recession and a surprisingly robust addition of new jobs in October.  Strong jobs data is the nemesis of low interest rates and today was no exception.

    Mortgage rates were already operating fairly close to long-term highs, but today's move easily took them to new highs.  The average lender is now quoting conventional 30yr fixed rates of 5% for relatively ideal scenarios.  Those without a big down payment or without perfect credit/income can expect to see even higher rates.  Most lenders ended up recalling the morning's initial rate sheets and reissuing higher rates at least once today. 

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    Mortgage Rates Are Actually a Bit Higher This Week

    It's Thursday!  That means it's time, once again, to set the record straight on today's actual mortgage rates as opposed to those suggested by almost any other news article on the topic today.  Why should you trust me as opposed to a multitude of financial journalists telling you something else?  Simply put, they're relying on Freddie Mac's weekly mortgage rate survey (which can be unavoidably stale) whereas I'm using a multitude of actual lender rate sheets to derive a highly reliable/accurate average.  Those using Freddie's numbers are relying predominantly on lender quotes from Monday and Tuesday whereas I've updated my averages in just the past hour, and for the 2nd time today!

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    Mortgage Rates Keep Edging Higher as Stocks Recover

    Mortgage rates were higher by a fairly small margin once again today.  Interest rates in general (which are determined by the bond market) have been taking most of their cues from recent stock market volatility.  That's not always the way it works, but it's the way things have been in the wake of the big stock losses seen on several occasions in recent weeks.  Now, as stocks begin to stabilize and move higher, rates have felt some pressure to do the same.

    Unfortunately, in relative terms, the recent drop in rates hasn't even come close to matching the move in stocks.  

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    Mortgage Rates Edge Higher

    Mortgage rates were moderately higher today as underlying bond markets continued backing away from their strongest levels in more than 3 weeks (stronger bonds = lower rates).  In general, bonds' strength had come at the expense of the stock market, but it was taking more and more drama in stocks to net the same amount of benefit for bonds. 

    For example, even though the S&P was lower yesterday than it was last Friday, bonds weren't able to make it back to last Friday's levels--something they would have easily done if they were keeping a consistent pace with stock losses.  With stocks improving modestly today, bonds were logically weaker.  To be fair, this relationship won't always set the tone for bonds, but it has been the biggest consideration this month.  

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    Mortgage Rates Stay Near Recent Lows as Busy Week Begins

    Mortgage rates didn't move today, despite a fair amount of underlying market volatility.  Rates are able to weather the sorts of storms you hear about in the stock market in part due to the diminishing returns of stock market drama on the bond market.  Along those same lines, the bonds that underlie mortgages specifically don't tend to react to stocks as much as mainstream bonds like US Treasuries. 

    Holding steady today means that rates remain at their lowest levels in just over 2 weeks.  That sounds like a good thing, but the catch is that we really haven't moved too far from recent highs during that time, and those are the highest highs in more than 7 years.

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