Mortgage rates moved slightly higher today. Yet again, underlying bond markets suggested another fate. In other words, if mortgage rates were perfectly tied to underlying bond markets, they would have remained unchanged today.
So why didn't they? The answer is as simple as the timing of lender rate sheets. Bond markets were in slightly weaker territory earlier this morning. This resulted in lenders offering slightly higher rates. As bonds improved throughout the day, the gains weren't quite enough for those lenders to "reprice" to lower rates. There's a certain bar to clear in terms of market movement before reprices make sense and we didn't clear it today.
Mortgage rates were microscopically higher today, which is paradoxical on two levels. The first paradox has to do with today's bond market improvements. Bonds underlie rates and bond market improvements coincide with rates moving lower--usually! In some cases, the day-to-day change in the bonds that underlie mortgage rates can be quite a bit smaller than the change in US Treasuries (the core of the US bond market). That was part of the problem today. The other part had to do with weakness yesterday afternoon. That weakness meant today's improvements merely got mortgage-backed bonds back to yesterday morning's levels despite being in stronger territory compared to yesterday afternoon's latest levels....(read more)
Mortgage rates moved modestly higher today after holding in roughly the same territory for the past 3 days. This brings them back in line with last Thursday's levels. In general, trade tensions helped the bond market earlier this week (stronger bonds = lower rates), but the bonds that underlie mortgages didn't benefit nearly as much as US Treasuries.
Additionally, mortgage lenders have had to play it safer than normal amid a rising rate environment and recently higher volatility. The net effect of these factors is that mortgage rates have often not been able to participate too much during the good days, but have still had to take their lumps on the bad days....(read more)
Mortgage rates didn't move much today, despite a somewhat decent improvement in bond markets. Overnight, trade war brinksmanship between the US and China had investors seeking the safe haven of bond markets. Excess demand for bonds pushes rates lower, all other things being equal.
As is often the case with safe haven trades, US Treasuries saw more of the benefit than the bonds that underlie mortgage rates. The net effect is a move back in line with last Friday's levels for the average mortgage lender....(read more)
Mortgage rates were sideways to slightly higher today, depending on the lender. The underlying bond market (which dictates rates) was exceptionally quiet. On the heels of last week's important events and without much on the calendar this week, markets may take a couple days to relax.
To put that in context, rates have been holding somewhat steady just below long-term highs. Their next major decision will be between pushing into new long-term highs or attempting to move lower for more than just a week or two. "Relaxation," in this context, means we're not likely to see evidence of either this week....(read more)
Mortgage rates fell again today, bringing the average rate just slightly lower on the week. Unlike the past 2 days, there were no big ticket calendar events today. Instead, motivation came from market jitters of new tariff announcements and the ensuing retaliation from China. Markets ultimately decided it wasn't the end of the world (yet) and bounced back in the other direction (higher stocks, higher rates) during the 2nd half of the day.
Fortunately, the bounce in rates (via the bond market) wasn't big enough to force mortgage lenders to adjust their rate sheets for the worse. That knife cuts both ways though. If bonds were to merely hold flat by the start of Monday's trading, the implication would be for slightly higher rates to begin the day....(read more)
Mortgage rates moved LOWER today, following a policy announcement from the European Central Bank (ECB). That claim runs counter to almost any other mortgage rate headline in the mainstream news because big media is in the habit of quoting Freddie Mac's weekly rate survey. That's not necessarily a bad thing as long as you understand the underlying timelines. Unfortunately, most news outlets gloss over those important details or leave them out completely.
Specifically, Freddie's survey is heavily weighted toward responses that come in on Monday and Tuesday, even though Wednesday is also technically included. Thursday and Friday are never counted. That means that any rate volatility that hits during the second half of the week typically isn't captured in Freddie's numbers....(read more)
Mortgage rates moved higher today, following the Fed's much-anticipated policy announcement. Although the Fed changed quite a few words from the announcement's previous iteration (far more than normal), it wasn't the announcement itself that did the damage. Rather, it was the Fed members' economic projections, which include an assessment of where the Fed Funds Rate will likely be at the end of the next few years.
Specifically, a few of the Fed members who'd been holding out for slightly lower rates in 2018 moved their forecasts up enough to increase the odds of a 4th rate hike by December. This was already a strong possibility, but before today, those in the "3 hike" camp had a stronger case....(read more)
Mortgage rates didn't move much today. That keeps them in line with some of the highest levels in nearly 7 years, though the same could be said for a majority of the days since mid-April. Rather than talk about where we are and where we've been, the hotter topic is where we may be going.
Stop me if you've heard this one before, but rates could move higher or lower. That's always the case because the financial markets that underlie rates (and everything else, for that matter) are always doing their best to adjust today's prices for everything that can be known about the present and the future. Presently, the range of potential outcomes is wider than normal because of the nature of upcoming events....(read more)
Mortgage rates edged up to the highest levels in several weeks today. Only a handful of days from mid-May stand between current levels and the highest rates in 7 years. That sounds a bit more dramatic than it is. Rates have been pretty close to these highs during the 2nd half of last week and just happened to move in an unfriendly direction by a medium-small amount today.
The middle of the week is more worthy of anxiety and anticipation. Between the important economic reports and the announcements from major central banks (the Fed and the European Central Bank) rates could easily be shooting to new long-term highs or surging triumphantly lower--at least in the context of the recent range. We're not talking about 30yr fixed rates rising above 5% or below 4%, but it's not uncommon to see a move of .125%-.25% when the stars align on these sorts of weeks....(read more)
Mortgage rates were steady again today, holding on to the improvements seen yesterday afternoon following a surprise "flash rally" in bond markets. Such flash moves always create the risk that rates will experience a correction that takes them quickly back in the other direction, so today's "flat" performance is actually fairly positive in the bigger picture.
Still, neither today nor yesterday's rate levels are even close to recent extremes. In order to see those boundaries tested (for better or worse) we'll need to wait for the more important events on tap for next week. These include several major economic reports as well as policy announcements from the Fed and the European Central Bank....(read more)
Mortgage rates were steady to slightly lower today, depending on the lender and the time of day. Rates were higher earlier this morning as bond markets began the day in weaker territory (bonds drive rates). Bonds have been in a weakening trend since the middle of last week when European political risks began to subside.
The early afternoon brought a wild and generally inexplicable move for bond markets. Much in the same way that we've seen "flash crashes" in the stock market from time to time, bonds underwent their own sort of flash crash. Actually, "crash" isn't the ideal word because the phenomenon involves a rapid improvement for bond prices and a rapid decline in bond yields....(read more)
Mortgage rates rose today, resuming an upward trend that began last week after political turmoil in Italy began to die down. More simply put, rates had been rising in mid May. Italy's political turmoil caused enough concern about the fate of the Eurozone that investors moved money into bonds, thus helping rates move lower. As risks subsided in Europe, rates have returned to similar levels as those seen in the first half of May.
Any talk of rejoining an upward trend that began last week is a bit misleading. In fairness, the broader trend has been toward higher rates since last September. Last week's move was one of the many volatility little episodes inside the broader trend....(read more)
Mortgage rates were little-changed today after rising somewhat quickly over the past 4 business days. This leaves them right on the top dead center of the proverbial fence. Or perhaps it's fairer to say A proverbial fence.
While rates are like any other financial instrument whose future can't be predicted, they do tend to pause and congregate at some levels more than others. We'll often see rising rates repeatedly run into a ceiling that goes on to become a floor in the future. This cycle can often repeat itself several times. That's the sort of fence we're dealing with at the moment....(read more)
Mortgage rates continued higher, adding onto a trend that began last Wednesday. A day earlier, rates hit their best levels in more than a month due to political risks in Europe. The trend back toward higher rates has coincided with the defusing of those risks.
Heading into this week, we said rates would be "deciding" if they could remain under a key ceiling. When we're looking at the mortgage market, rates aren't as precise as, say, the US Treasury market. For instance, 2 different lenders could be more than an eighth of a percent off from each other despite almost always moving by the same amount in the same direction every day....(read more)