Mortgage rates held their ground yesterday. That was a refreshing development given the abrupt move higher over the past 2 weeks and a relatively threatening reaction to Wednesday's Federal Reserve events. Now again today, rates have managed to hold their ground. In some cases, lenders improved by token amounts. If yesterday was refreshing, today would be doubly so.
But the refreshment comes with caveats. We don't really know what the natural direction would have been for rates today because underlying markets were clearly affected by overnight headlines regarding North Korea potentially testing an ICBM with a Hydrogen warhead in the Pacific Ocean. In general, these sorts of headlines lead investors to shed risk--something that frequently takes the form of selling stocks and buying bonds. When investors buy bonds, rates move lower....(read more)
Mortgage rates have been higher almost exclusively for the past 2 weeks. Yesterday was no exception as the Federal Reserve released a rate hike forecast that was slightly more optimistic than markets were expecting. By yesterday afternoon, the average 30yr fixed mortgage rate was at its highest levels in over a month.
The Fed news justified a defensive stance among prospective mortgage borrowers. When rates move initially higher following a Fed announcement, it's all too common to see that momentum continue in the following day. In today's case, we've actually seen a bit of support. Underlying bond markets were in slightly better shape vs yesterday for most of the day, thus allowing lenders to either keep mortgage rates unchanged or to bring them marginally lower....(read more)
Mortgage rates rose today following the announcement and--more importantly--the Fed's updated economic projections. The Fed holds 8 meetings a year. They release an official policy announcement after all of those. Four of the meetings are "special" and are followed not only by a policy announcement, but also by updated economic projections from Fed members. These projections include an important "dot plot" of the Fed's rate hike expectations.
The so-called dots have been more important than the actual announcement on some occasions. While most of today's press coverage will focus on the fact that the Fed finally enacted its plan to shrink its balance sheet. That was widely expected, however....(read more)
Mortgage rates remained unchanged today, on average. This keeps them in line with their highest levels in more than a month, though admittedly, there hasn't been much upward movement since the sharpest leg of the spike ended last Wednesday. Conventional 30yr fixed rates in the "high 3's" remain available for top tier scenarios, but 4.0% is slightly more prevalent now.
While there were several economic reports and seemingly important news stories today (both tend to have an effect on rates), bond markets marched to their own beat. Traders were generally getting in position for tomorrow's Fed Announcement. Two weeks ago, the order of the day had been to push rates lower heading into Hurricane Irma weekend. There's been a correction in play since then. From the long-term lows in early September, traders judged a neutral, pre-Fed rate range to be right around current levels....(read more)
Mortgage rates resumed their recent uptrend today, after taking a quick break to end the week last Friday. The result is another push up to the highest levels in just over 3 weeks. The average scenario is being quoted rates that are about an eighth of a point higher compared to the lows seen in early September. The most prevalent top-tier conventional 30yr fixed rates still range from 3.875% to 4.0%, but the latter is increasingly in the spotlight.
Context is important when it comes to this recent rate spike. The market movement that preceded it was arguably "too good," with rates benefiting from an unusual combination of geopolitical risk surrounding North Korea and event risk surrounding Hurricane's Harvey and Irma....(read more)
Mortgage rates were steady to slightly lower on average today, confirming the end of a somewhat abrupt correction from last week's 2017 lows. In other words, rates rose quickly during the first days of the week and spent the last 3 days leveling off. To put "abrupt" in context and reiterate yesterday's thoughts, the worst case scenario would be an eighth of a percentage point higher in rate from last week. That's $14/month on a $200k loan. We've certainly seen worse weeks day, but only 2 of them were in 2017.
The flat momentum at the end of this week isn't too likely to stick around next week. The Fed will (probably) make a ......(read more)
Mortgage rates moved higher today, despite resilience in underlying bond markets. If you were to ask bonds, they'd vote for rates remaining flat--well, sort of. There is a timing issue that I brought to your attention yesterday where mortgage lenders had yet to adjust for yesterday afternoon's bond market weakness (weaker bonds = higher rates) and were thus more likely to start today with higher rates, all other things being equal.
That's exactly what happened. And while it does mean that rates are higher than they were yesterday, we're actually seeing some supportive cues in bond market for the first time all week. Specifically, bonds have held fairly steady today--something they've had a hard time with recently. It's early to say for sure, but this could be the first sign that this week's corrective uptrend in rates is running out of steam....(read more)
Mortgage rates held steady today, and were slightly lower in some cases. That's not entirely logical at first glance because the bonds that dictate mortgage rates suggested the opposite. Considering a 2-day time frame helps us reconcile this paradox. Bonds had improved by the end of the day yesterday, albeit slightly. Lenders, however, didn't account for that improvement by changing rates yesterday. Instead, they made their adjustments with this morning's rate sheets. Bonds were unchanged to slightly stronger this morning. Today's weakness arrived after......(read more)
Mortgage rates continued higher at a reasonably abrupt pace today as last week's themes have been completely reversed. What themes are those? Generally speaking, markets were undergoing a risk-aversion trade given the rising geopolitical tension surrounding North Korea and the economic uncertainty associated with back-to-back hurricanes.
Risk aversion tends to take the form of investors seeking safer haven assets like bonds at the expense of higher growth potential assets like stocks. Indeed, stocks had stumbled sideways to slightly lower last week while bond prices rose (higher bond prices = lower rates). Now that dynamic is reversing with stocks breaking to new all-time highs while bond prices move lower (lower bond prices = higher rates)....(read more)
Mortgage rates finally had a bad day, but everything's relative. This sort of bad day leaves the average lender quoting rates that would have been the best of 2017 any other time before last week. It's only when compared to last week that we'd consider them to be moderately higher.
How much higher are we talking about? Let's put it this way: most borrowers will still be quoted the same interest rates seen on Friday with the weakness being seen in the form of slightly higher upfront costs. In the worst cases, the cost change could be just over 0.3% of the loan amount, or $300 for every $100,000 borrowed. The alternative would be to move up an eighth of a point in rate and pay lower upfront costs (or potentially get a lender credit, depending on the scenario)....(read more)
Mortgage rates were slightly lower today, despite moderate weakness in underlying bond markets. This would typically coincide with higher rates, but mortgage lenders haven't been moving in lock-step with markets amid this week's higher volatility.
The first dose of volatility came early, with weekend headlines concerning North Korea resulting in a nice move lower to start the week. Rates bounced on Wednesday on news of a bipartisan agreement to provide disaster relief and to temporarily raise the debt ceiling. The latter had been causing general economic concern--something that tends to benefit rates....(read more)
Mortgage rates didn't move much today, despite plenty of strength in underlying bond markets. This would normally coincide with lower rates, so what's the deal?
The main issue is timing. Bond markets weakened yesterday afternoon. This would imply higher rates, but most lenders never went to the trouble of adjusting rate sheets intraday. As I said yesterday, those lenders would begin today at a disadvantage. Indeed they did, and that disadvantage was generally erased by the improvement in bond markets. Thus, lenders who didn't move rates higher yesterday were able to keep today's rates relatively unchanged, thanks to bond market gains. Lenders who DID raise rates yesterday were able to offer slightly lower rates today....(read more)
Mortgage rates moved lower this morning, more by way of catching up with yesterday's market movement than anything. Specifically, bond markets (which underlie interest rates) were very little changed this morning. Because mortgage lenders hadn't fully adjusted yesterday's rate sheets to reflect yesterday's strong move in bond markets, rates had a bit farther to fall. As such, most lenders began the day with the best rate sheet offerings of the year.
Quite a few lenders ended the day at the best levels of the year as well, but more than a few made negative adjustments in the afternoon due to market volatility....(read more)
Mortgage rates moved lower today on a combination of factors. Chief among these were headlines over the weekend concerning more North Korean weapons testing--specifically, a detonation of its largest bomb ever on Sunday followed by reports from South Korea of another ballistic missile test by the end of the week. The threat of global nuclear conflict pushes rates lower because the bond markets that underlie rates can benefit from fear and panic. Investors seeking safe havens often move money into bonds, where higher demand equates to lower rates....(read more)
Mortgage rates were sideways to slightly higher today despite a weak reading of the Employment Situation (aka "the jobs report"). This is traditionally the most influential piece of economic data on any given month as far as bond markets (which drive mortgage rates) are concerned. Recent intractability of inflation combined with several years of solid jobs gains have increasingly robbed this report of that historical influence.
Don't get me wrong. The jobs report is still a big trading day for markets. It's just that we're not seeing bonds end up where past precedent would suggest. Specifically, today's report would clearly suggest lower rates by the end of the day. Instead, the average lender is slightly higher....(read more)