Mortgage News

Mortgage Rates Struggle to Stay at Recent Lows

Mortgage Rate News - Tue, 08/17/2021 - 15:51
Mortgage rates experienced an uptick in volatility last week as the broader bond market was hit with a big dose of new supply. In other words, between a set of scheduled Treasury auctions and a surge in corporate bond issuance, there were lots of new bonds looking for buyers. More supply means bonds have to offer higher yields (aka "rates") in order to attract buyers. Mortgage rates moved higher as a result, but only in the first half of the week. Once the market worked through the supply, renewed covid fears and geopolitical risks combined to tip the scales back in favor of bond buyers (investors often seek out bonds as a safe haven amid uncertainty and/or economic weakness). More buyers mean lower rates, all other things being equal. The good times kept rolling up until Monday morning. The
Categories: Mortgage News

Rates Recover After Bumpy Week; Realtors See Prices Moderating

Mortgage Rate News - Fri, 08/13/2021 - 19:36
Mortgage rates bounced at 6 month lows early last week and moved higher at a faster-than-normal pace through the middle of this week. They've been slow to recover, but Friday went a long way toward solidifying the short-term ceiling. Economic data inspired the move on Friday with Consumer Sentiment falling to the lowest levels since 2011 , just edging out the lows seen at the start of the pandemic. The University of Michigan, which has conducted the survey for decades, called out the "stunning loss of confidence" as being distorted by consumers' emotional response to the resurgence of the pandemic, ultimately concluding "consumers will again voice more reasonable expectations" in the coming months. In other words, they think the number is significantly lower than warranted by actual economic
Categories: Mortgage News

Mortgage Rates Catch a Break, But Will It Last?

Mortgage Rate News - Wed, 08/11/2021 - 19:23
By now, it's no mystery that mortgage rates are significantly higher than they were last week. The bigger mystery had to do with what comes next. In some ways, the recent jump in rates could be viewed as a warning sign about more trouble ahead. At the very least, it proved that the market was willing to react to various inputs in logical ways. Last week's chief example was the strong jobs report which did more than anything to accelerate the move higher in rates. Through a different lens, we could simply say the market was reacting to the inputs that were available at the time, and that it will continue to do so. That's a fairly vague assertion, so let's clarify . The key inputs are interdependent to some extent. It's very easy to pin rate momentum on changes in bond buying policies from the
Categories: Mortgage News

Mortgage Rates are Much Higher This Week

Mortgage Rate News - Tue, 08/10/2021 - 17:03
After hitting 6-month lows early last week, mortgage rates bounced and have been moving higher ever since. The increases were moderate at first, but the pace quickened after last Friday's jobs report. In general, strong economic data is bad for rates. The jobs report is generally considered to be the most important piece of economic data for rates. That's especially true right now as the Fed tries to decide when it will slow the pace of its bond buying program. The Fed isn't the only consideration for rates though. In fact, while the timing is a bit of a moving target, it's really the underlying economy that stirs the Fed to action. And as far as the economy is concerned, the state of the pandemic is probably the most important input, but there are others that rival it from time to time. Over
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Rates at 3-Week Highs, More Volatility Ahead

Mortgage Rate News - Fri, 08/06/2021 - 16:46
Rates were excellent at the beginning of the week, but that began to change on Wednesday. We were already well on our way to 3-week highs on Thursday, and Friday made it official. Notably, these 3-week highs are still historically low. Friday's main source of drama was the strong jobs report from the Labor Department. The unemployment rate dropped from 5.9% to 5.4%, easily besting expectations of 5.7%. This was accomplished despite a 0.1% increase in Americans who considered themselves part of the labor force (a statistic that is sometimes used to offset changes in the unemployment rate). The jobs report is always important, but this one and the next one are particularly important . They provide 2 key data points that will help inform the timing of the Fed's decision to decrease its bond buying
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Mortgage Rates Move Up From Long-Term Lows

Mortgage Rate News - Wed, 08/04/2021 - 17:10
Mortgage rates hit their best levels in 6 months yesterday, but moved higher today following a strong report on the services sector. The economy is one of the key inputs for interest rates. As such, several of the most relevant economic reports have a longstanding history of causing day-to-day volatility. Today's ISM Non-Manufacturing Index is one of a handful of the most important reports. By coming out much stronger than expected, it suggested the economy was closer to a level that would prompt the Fed to make changes to rate-friendly policies. Bonds reacted with lower prices and higher yields (aka "rates"). Of course we're only talking about only one economic report. A few short hours earlier, another important report, ADP Employment, missed by a longshot. A few days ago, ISM's own manufacturing
Categories: Mortgage News

Mortgage Rates Drift Down to New 6-Month Lows

Mortgage Rate News - Tue, 08/03/2021 - 17:17
Mortgage rates moved slightly lower again today--extending a steady string of improvements that began after last week's Fed announcement. The average lender is now able to quote conventional 30yr fixed rates that are at least as low as those seen in the middle of July. In most cases, today's offerings are slightly better. The details can vary quite a bit depending on the scenario (purchase/refi, credit, downpayment, etc), but best-case scenarios have been back in the "high 2's" for weeks. In almost all cases, today's rates are the lowest since the beginning of February. What's up with the refreshingly strong move back toward all-time lows? At the beginning of the year, if you could only make one bet on rates, "higher" made more sense than "lower." That would actually still be a good bet as
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Mortgage Rates Near Long-Term Despite Taper Talk

Mortgage Rate News - Thu, 07/29/2021 - 16:00
"Taper talk" refers to comments, speeches, or official policy communications from the Federal Reserve (aka "the Fed") that speak to the timing and nature of a reduction in the Fed's bond buying activities. Wow! What a boring and potentially confusing sentence! Let's try again... The Fed buys bonds --US Treasuries and mortgage backed bonds (which, in turn, serve as the foundation for mortgage rate pricing). This helps rates move or remain low. When markets think the Fed is going to stop buying bonds, rates are at risk of moving higher. The current bond buying efforts began as a response to the pandemic. They helped stabilize the financial system and they provided "accommodation" (a boost to overall economic activity intended to support the Fed's goals on inflation and job growth). As the pandemic
Categories: Mortgage News

What Will The Fed Do To Mortgage Rates?

Mortgage Rate News - Tue, 07/27/2021 - 16:32
Wednesday afternoon brings one of the year's 8 regularly scheduled policy updates from the Federal Reserve (aka, the Fed). While there's no question that Fed policies have significant impacts on all kinds of interest rates, the Fed doesn't actually "set" mortgage rates. The only limited exception would be for certain lines of credit that adjust based on the PRIME rate which, in turn, is based on the Fed Funds Rate (the thing the Fed actually DOES "set"). Even if the Fed Funds Rate had a direct bearing on mortgage rates (it doesn't), there's no chance that they'll announce a rate hike this week, let alone this year. So why do we care about the Fed? Why have we seen such big moves in mortgage rates after certain Fed announcements in the past? As far as the mortgage market is concerned, the biggest
Categories: Mortgage News

Mortgage Rates In Best Territory Since February

Mortgage Rate News - Thu, 07/22/2021 - 16:06
This week's mortgage rates are hard to compare to last week's. There are two simple reasons for this. The first is the recent removal of the adverse market fee that artificially increased rates for refinance transactions starting late last summer. The second is the general strength in the bond market compared to last week. Mortgage rates are, after all, based on trading levels in the bond market with higher prices (or lower yields) coinciding with lower rates. Bonds aren't doing quite as well as they were doing on Monday, but because lenders didn't rush to drop rates as much as the bond market allowed earlier in the week, they haven't had to dial things back as much as bonds would suggest over the past 2 days. Now today, bonds are improving once again, albeit only slightly . Still, the fact
Categories: Mortgage News

Mortgage Rates Substantially Lower This Week, But Under Some Pressure Today

Mortgage Rate News - Tue, 07/20/2021 - 15:50
There are two pieces of big news for mortgage rates over the past few business days. The first arrived last week in the form of the removal of the adverse market fee that artificially increased rates for refinance transactions starting late last summer. The second arrived yesterday in the form of an impressive improvement in the bond market (bonds are the primary source of motivation for mortgage rates). This friendly double whammy pushed the average lender easily into the lowest rate range since early February with conventional refinance quotes once again coming in under 3.0% in best-case scenarios. It remains to be seen how long we'll be able to enjoy these rates. Today's bond market volatility offered a warning . The first few hours of trading were actually stellar, with bonds improving
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Big News For Refi Rates As Adverse Market Fee is Removed

Mortgage Rate News - Fri, 07/16/2021 - 17:16
It was big, bad news when it came out last summer. Almost a year later, the 50 basis point "adverse market fee," which affected a majority of refinance mortgages has been eliminated! Backstory In early August 2020, Fannie and Freddie (who collectively buy or guarantee a vast majority of all mortgages) announced that virtually all conventional refinance loans would be subject to a new fee of 0.50 points (e.g. an extra $1500 upfront on a $300k loan, or a 0.125-0.25% increase in rate). After much protest, the implementation of the fee was delayed at the end of August. Lenders ultimately began adding it back into rate sheets en masse by mid September. All of the above can be seen in the following chart which shows the effects on average daily rates. Fast forward to the summer of 2021 and some recent
Categories: Mortgage News

Mortgage Rates Recover Most of Yesterday's Losses

Mortgage Rate News - Wed, 07/14/2021 - 16:25
Mortgage rates moved higher yesterday after a poorly-received 30yr bond auction ( read more... ). The bond market began to heal in the overnight trading session. By the time US traders clocked in this morning, more than half of the weakness had been erased. As the day progressed, things have only improved. All this despite another hotter-than-expected inflation report (something that traditionally puts upward pressure on rates) to kick off the day. While inflation is indeed bad for rates, all other things being equal, there are several caveats at the moment. The first is that the current inflation spike is well understood as being driven in large part by covid-related supply chain disruptions, even if the boundaries are not easy to predict in the short term. Everyone hopes or expects the inflationary
Categories: Mortgage News

Mortgage Rates Moving Higher So Far This Week

Mortgage Rate News - Tue, 07/13/2021 - 16:26
Mortgage rates are coming off a solid performance last week after having moved to the lowest levels in 5 months by Thursday afternoon. This week is shaping up to be a bit different , however. In fact, as of this afternoon, the average lender has lost most of last week's improvements. What's behind the volatility? There are both general and specific considerations. In a general sense, last week's bond market gains (stronger bonds = lower rates) were perhaps a bit overdone. They set the stage for a potential correction purely for technical reasons. In other words, nothing new or notable changed after last Thursday to push rates back up--at least not until today. Today brought the specific considerations with a double whammy from inflation data and a Treasury bond auction. The consumer price index
Categories: Mortgage News

Mortgage Rates Officially Hit 5-Month Lows

Mortgage Rate News - Thu, 07/08/2021 - 17:07
With yesterday's mortgage rates already near longer-term lows, all it took was a modest improvement for today's rates to officially hit their best levels since February . The strong move in the bond market (which dictates rates) was more than enough. Back in February, we were passing through the present rate range on the way UP , and there were few--if any--reasons to think that we'd return to those levels given the present realities. Specifically , covid case counts are roughly as low as they've been since the start of the pandemic. Economic data has been strong. Inflation metrics have been running hot (inflation is bad for rates). And the Fed is increasingly talking about dialing back its rate-friendly bond-buying programs. But as is always the case, markets were trying to price in as much
Categories: Mortgage News

Mortgage Rates Very Close to 5-Month Lows

Mortgage Rate News - Wed, 07/07/2021 - 16:15
Mortgage rates have fallen fairly consistently over the past 2.5 weeks with the past 2 days seeing some of the better improvements. There haven't been any major revelations behind the move, but timing plays a role. Last week ended with a stronger-than-expected jobs report. That's the sort of thing that typically pushes rates higher, but the bond market took it in stride this time. Still, that was only enough to keep rates relatively flat, which makes sense considering the extra uncertainty associated with a 3-day weekend for markets. When trading resumed yesterday, bonds improved significantly (bond market improvement = lower rates, all other things being equal). With the uncertainty of the 3-day weekend behind them and fresh bond gains in the new week, mortgage lenders had two good reason
Categories: Mortgage News