Mortgage News

Yes, Mortgage Rates are MUCH Higher This Week

Mortgage Rate News - Wed, 02/17/2021 - 16:33
Volatility has returned to the mortgage market in grand fashion this week with many lenders quoting rates that are as much as a quarter of a point higher than they were last week. That means if you were looking at something in the 2.75% neighborhood on Friday, it could be 3.0% today. What gives? The upward pressure is nothing new , really. It has existed in the broader bond market since August, but only recently began spilling over to the mortgage market. We've been discussing the increased risks of such a spillover in the event of a sharper bond market move and yesterday brought just such a move. Today was much more docile by comparison, but it didn't do anything heroic to push back against yesterday's weakness. Still, there could be some promise of stability in the fact that the bond market
Categories: Mortgage News

Rates Surge; Time To Adjust Your Mortgage Game Plan

Mortgage Rate News - Tue, 02/16/2021 - 16:48
Recovery prospects, renewed focus on stimulus, inflation concerns, a brighter covid outlook, etc... All of these are reasons for an ongoing, gradual trend toward higher rates in 2021 (i.e. general bond market weakness) but none of them really explain why the bond market had its worst day in months today specifically. Still, pundits are pointing to the laundry list of usual suspects to explain the move. In their defense, that's all anyone can really do on a day like today. At a certain point market momentum becomes its own justification and bond prices snowball to lower and lower levels. When bond prices fall, rates rise--a fact which is abundantly clear in comparing today's rates to those seen late last week. The average lender is quoting conventional 30yr fixed rates that are roughly 1/8th
Categories: Mortgage News

When Will The Mortgage Market Actually Care About Rising Rates?

Mortgage Rate News - Thu, 02/11/2021 - 15:27
There's an obvious trend toward higher rates as far as Treasury yields are concerned. This goes all the way back to August. Treasury yields and mortgage rates historically correlate quite well. But mortgage rates have almost completely ignored that correlation recently. In fact, most of the 2nd half of 2020 saw mortgage rates fall while Treasury yields continued higher. The chart above doesn't tell the whole story because it uses a separate y-axis for each line. Here's the same time frame with mortgage rates and 10yr yields on the same axis: That still doesn't tell us much although we can certainly see different patterns. Here's another look at the same two rates on the same axis, but this time we're charting the CHANGE since Jan 1, 2020. This one probably tells the story better than the rest
Categories: Mortgage News

Mortgage Rates Lowest in More Than a Week

Mortgage Rate News - Wed, 02/10/2021 - 16:26
Mortgage rates haven't been moving much recently, but they've logged enough small victories to make it back to the lower levels seen on February 1st . Depending on the specific scenario and the lender, a quoted rate may or may not be visibly different between now and then. In cases where they seem to be the same, the change could come down to the "upfront cost" side of the mortgage rate equation (which allows lenders to make fine-tuning adjustments without having to move rates by the customary 0.125%). The underlying bond market serves as the foundation for all interest rates. US Treasuries and mortgage-backed bonds tend to behave similarly. That hasn't been the case for much of the past year, but things have been getting back to normal recently. With that in mind, there was some risk today
Categories: Mortgage News

Mortgage Rates Roughly Unchanged From Last Week

Mortgage Rate News - Tue, 02/09/2021 - 17:03
Mortgage rates have been extremely stable given their proximity to all-time lows. Past precedent suggests one of two things when rates set records: a slow grind lower with additional periodic records or a rather abrupt bounce back in the other direction. The 2nd half of 2020 was definitely characterized by the aforementioned slow grind with at least 20 separate days resulting in record low rates by December 21st. Since then, rates have gone no lower, but apart from a brief stint in early January, they really haven't gone appreciably higher either. This is made all the more impressive by the fact that the broader bond market is indeed telling mortgage rates to rise. Specifically, 10yr Treasury yields--a perennial travel companion for 30yr fixed mortgage rates--have been rising consistently since
Categories: Mortgage News

Rates Under Pressure Despite Weak Jobs Report

Mortgage Rate News - Fri, 02/05/2021 - 17:17
Economic data is traditionally one of the key contributors to interest rate movement. Of the regularly-scheduled reports, none has more market-moving street cred than The Employment Situation--otherwise known as "the jobs report" or simply NFP (due to its headline component: Non-Farm Payrolls). The relationship between econ data and rates can wax and wane. Covid definitely threw a wrench in the works, and economists still don't know exactly how things will shake out. In general, the market is trading on the assumption that things continue to improve even if the data isn't making that case today. In fact, today's jobs report specifically suggests something quite different . The economy only created 49k new jobs in January, and the last few reports were revised much lower to boot. Taken together
Categories: Mortgage News

Mortgage Rate Volatility Could Increase After Tomorrow's Jobs Report

Mortgage Rate News - Thu, 02/04/2021 - 17:02
Mortgage Rates have risen modestly over the past few days with the average lender now offering the highest rates in roughly 2 weeks. The ground covered during that time is fairly underwhelming unless you make a habit of examining day-to-day rate movement under a microscope. In many cases, a prospective mortgage borrower would be seeing the same "note rate" on a mortgage quote throughout that 2 week period. Why am I telling you that rates have moved then? Because "note rates" are only one side of the mortgage rate equation. The upfront costs (or credits) determine the other side. An increase in upfront lender costs (or a decrease in lender credit) is the same thing as a higher interest rate. That upfront side of the equation allows for smaller adjustments. Consecutive days with similar adjustments
Categories: Mortgage News

Mortgage Rates Slightly Higher

Mortgage Rate News - Tue, 02/02/2021 - 15:59
Mortgage Rates were steady to slightly lower yesterday even though prevailing trends in the bond market suggested caution. Today's trading is a different story. Granted, there haven't been any huge, dramatic moves, but today's bond market weakness adds a bit of evidence for a more cautious approach. In general, rates are biding their time in a low, narrow range (just slightly higher than the all-time low range seen at the end of 2020) before making their next big move. That "next move" is to-be-determined. It will take guidance from things like economic data, fiscal stimulus, major covid-related news, and even the stock market. The average mortgage lender is generally offering the same rates as yesterday, but with modestly higher upfront costs (or lower lender credits). The range for purchases
Categories: Mortgage News

Mortgage Rates Hold Steady to Start New Week

Mortgage Rate News - Mon, 02/01/2021 - 15:56
Mortgage Rates did well last week, with the average lender getting very close to long-term lows by Wednesday. After that, however, volatility in the bond market caused some concern about an unfriendly shift in rate momentum. Today's trading helps soothe those concerns as the bond market (which dictates rates) held inside a narrow range very close to Friday's latest levels. The average mortgage lender offered rates that were at least as good as Friday's with purchases still seeing 2.5-2.625% and no-cash-out refis in the 2.75-2.875% neighborhood (this assumes a top tier conventional 30yr fixed loan with at least 20% equity, 740+ credit, and no other negative loan level price adjustments). The bond market has a lot on its mind these days. A large scale battle is being waged between all of covid
Categories: Mortgage News

Why Mortgage Rates Should Care About Bond Market Warning

Mortgage Rate News - Fri, 01/29/2021 - 17:34
After spiking in early January, interest rates returned to near-all-time-low levels by the middle of the week. By the end, however, the market began to flash a warning about more volatility ahead. The warning is fairly simple. It has to do with a pattern that's been repeating in the bond market (the key ingredient in determining rates). The pattern is technically referred to as a "trend channel," which is just a fancy way of saying that rates are steadily rising or falling in a relatively regular way. In the current case, they've been rising since August. Rates tend to fall when the economic outlook is downbeat or uncertain. As such, it makes sense to see volatility and all-time lows during the first phase of the pandemic followed by gradual healing in the 2nd half of the year. Gradual healing
Categories: Mortgage News

Mortgage Rates Start Strong But End Higher

Mortgage Rate News - Thu, 01/28/2021 - 16:21
Mortgage rates have had a great couple of weeks after jumping to multi-month highs at the beginning of January. By yesterday, they'd made it almost all the way back to their best recent levels. The same was true this morning, but things have changed since then. The bond market (which dictates rates) had its worst day in several weeks. This was at least partially in response to volatility in equities markets which helped bonds yesterday but hurt them today. When bonds lose enough ground during the course of a day, mortgage lenders can adjust their rate offerings with what's known as a "mid-day reprice." Reprices can be for the better or worse. Today's were worse , but the damage is far from severe --only unwinding a day or two of the recent improvement. The average mortgage borrower would likely
Categories: Mortgage News

Mortgage Rates Mostly Recover After Starting The Day Higher

Mortgage Rate News - Tue, 01/26/2021 - 16:27
Mortgage rates were mixed to slightly higher today, depending on the lender. "Higher" is a relative term, in this case as the average loan seeker is unlikely to see much of a difference between yesterday's quotes and today's. Even then, the changes would almost certainly be in the form of upfront costs (or lender credits) rather than to the interest rate itself. For the sake of thoroughness and accuracy, keep in mind there are really two different kinds of rate when it comes to mortgages. The " note rate " is unsurprisingly the rate found at the top of your mortgage note. This is the rate that's applied to the principal balance of your loan in order to determine your principal and interest payment. The other rate would be the APR (annual percentage rate), which factors in all of the upfront
Categories: Mortgage News

Mortgage Rates Down Only Slightly Despite Bond Market Rally

Mortgage Rate News - Mon, 01/25/2021 - 16:47
What's a bond market rally and why should mortgage rates care? There are all kinds of bonds. US Treasuries would be the quintessential example, but there are also bonds specific to the mortgage market. These are what groups of loans ultimately become in order to be traded on the open market (thus allowing lenders to make more loans with less risk and lower rates). As investors buy and sell bonds throughout the day, bond prices change. The higher the price, the lower the implied interest rate. Simply put, if bonds are rallying, rates should be falling shortly thereafter. The 10yr Treasury yield is typically an excellent barometer for mortgage rate movement. 10yr Treasuries and mortgage-backed bonds tend to correlate extremely well. As such, we might expect a more significant improvement in mortgage
Categories: Mortgage News

How Long Can The Good Times Last For Housing and Rates?

Mortgage Rate News - Fri, 01/22/2021 - 16:25
While it wasn't quite the biggest surprise of 2020, the strength of the housing market was one of the best. The just-released numbers for December keep the good times rolling. Leading the charge was December's Existing Home Sales report from the National Association of Realtors (NAR). The annual pace wasn't quite at the recent 15-year high seen 2 months ago, but it hasn't really fallen since then. No complaints. If you want to see more 15-year records broken, you'll have to rely on The Census Bureau's New Residential Construction numbers. While not a direct measure of New Home Sales, the correlation is high (we'll get the official sales numbers next Thursday). For now, we can bask in the warm glow of another long-term high in Housing Starts. With sales and construction numbers like this, it
Categories: Mortgage News

Mortgage Rates Almost Back to Early January Levels

Mortgage Rate News - Thu, 01/21/2021 - 16:24
Mortgage rates made more progress today, but only after some drama in the morning. The bond market started the day in weaker territory and many mortgage lenders were offering higher rates as a result. As the day progressed, bonds improved and lenders adjusted their offerings accordingly. By the afternoon, the average lender was in better territory than yesterday. The improvement is the latest in a string of slow, steady gains for the mortgage market. While the average lender is not yet quite back to the super low territory from early January, many are as close as they've been since the January 6th rate spike following the Georgia senate election. Top tier purchase rates for conventional 30yr fixed loans are in the 2.5 to 2.75 neighborhood while top tier no-cash-out refis are about an eighth
Categories: Mortgage News

Mortgage Rates Making Steady Progress Over The Past Week

Mortgage Rate News - Wed, 01/20/2021 - 16:43
Mortgage rates are off to a decent start this week with the average lender offering slightly better terms compared to last Friday. The progress actually began earlier last week. On Tuesday morning, rates were at their highest levels in exactly 2 months after jumping at a relatively quick pace in response to the Georgia senate election. The underlying bond market was making an adjustment for a likely increase in Treasury issuance in the short term. There was no way to be sure how long that adjustment would last or how much it would impact rates. That uncertainty began to clear up on Tuesday as a scheduled auction of US Treasury debt was met with strong demand. After that, the tone in the bond market shifted for the better and we've seen additional examples of resilience. In general, when bonds
Categories: Mortgage News

The Real Story Behind The Past 2 Weeks of Mortgage Rate Volatility

Mortgage Rate News - Fri, 01/15/2021 - 16:44
It was easy to get lulled into complacency by the second half of 2020 when it came to mortgage rates. Even as other indicators said rates should be rising, they continued on a calm journey to multiple record lows. 2021 has been very different so far! Covid and its impacts on the economy remain the driving forces behind market trends. That's generally been great for rates, but it also means that rates should gradually rise as we battle back against covid. If the onset of the pandemic pushed rates to all-time lows, it's only fair that progress against the pandemic would result in rates moving up from all-time lows. If you ask 10yr Treasury yields, that's been the case for quite a while. And while the stock market has been singing a similar tune, the mortgage market has been in its own glorious
Categories: Mortgage News