Mortgage Rate News

Mortgage rates hit their lowest levels in more than a month last Thursday, but reversed course later that afternoon. With that, it looked like rates would continue settling in to a sideways range for April (not a bad outcome considering the abrupt rate spike seen in the first 3 months of the year). But now today, the bond market (the primary consideration for mortgage rates) bounced back into the same stronger territory seen last week. Most mortgage lenders updated their pricing by the afternoon, bringing the average conventional 30yr fixed quote back near last week's lows. Based on the ground covered so far this year and the risk for additional upward pressure in the future, merely holding steady is a victory . Days like today, where rates move unexpectedly lower, are pleasant surprises, but

The bond market has been pointing toward higher rates since last August. Mortgage rates were able to defy that trend at first, but finally began spiking in the new year. February and March were two of the worst back-to-back months in years. The higher rates went, the more likely it became that we'd see at least some sort of push back in the other direction. Anticipation and anxiety were running high as rates hit long term peaks at the end of March. Now 2 weeks in, April is clearly the month we were hoping it would be. Rates haven't dropped this quickly since the pandemic began What's with the change of heart? The bond market (which dictates rates) has a few quintessential sources of motivation. "The economy" is at the top of that list. Indeed, a brighter economic outlook (due to vaccines, falling

It's no secret that mortgage rates had a rough month in March and a rough year in general. The average lender raised 30yr fixed rates by roughly half a percent in February and March alone. But April has proven to be an entirely different sort of month so far. In the past 2 weeks, rates are down nearly a quarter of a point on average. Today played a critical role in the improvement as lenders responded in waves to an exceptionally strong day for the underlying bond market (bonds are the primary driver of day-to-day rate fluctuations). One of the most interesting things about today's move was that the bond market improved AFTER a slew of significantly stronger economic data. That's interesting because the quintessential reaction function in the bond market is exactly the opposite! In other words

Slow and steady wins the race, and mortgage rates have been making slow, steady progress back down from recent long-term highs seen at the end of March. Over that time, the average conventional 30yr fixed rate quote has fallen anywhere from .125 to 0.25% depending on the lender. That's not a bad move over the course of 2 weeks and especially in an environment where lenders have every right to be defensive. After all, there have been numerous "false starts" for the sort of winning streak we're currently enjoying. Beyond that, with rates so closely tied to covid and the economy , "higher rates in 2021" has been an easy thesis for market watchers. Anything that runs counter to that will need to bring a compelling explanation. It's no surprise, then, to see the "pause" of the J&J vaccine in

2021 hasn't been a great year for mortgage rates--at least not as far as their trajectory is concerned. But that could be changing . Even if things don't get any better from here, the past 3 weeks are collectively the best we've seen since January. Mortgage rates are primarily driven by day-to-day movement in the bond market. There is a particularly strong correlation between 10yr Treasury yields and mortgage rates. While this definitely wasn't the case for much of 2020, the correlation is now generally back intact. As such, the ability of 10yr Treasury yields to remain under a ceiling of 1.75% has coincided with resilience in the mortgage market. If we zoom in on the blue line, we can see 10yr yields departing their prevailing trend for 2021 and starting to move sideways in recent weeks. It

Mortgage Rates had another decent day on Thursday with the average lender offering modestly better terms compared to yesterday. Improvements continue to arrive in fairly small doses, but they've been adding up . You'd have to go back nearly a month to March 12th to see anything definitively lower (although it's worth noting that today's rates are also roughly in line with those seen on March 25th). As far as specific levels, lenders remain widely stratified with purchases being quoted in a range of 3.00-3.125% and refinances in a range of 3.125-3.375 (conventional, 30yr fixed). Today's specific events and economic data releases did little to motivate the gains seen in rates, although a report showing higher-than-expected Initial Jobless Claims technically agrees with the move. There were also

Mortgage Rates have been doing pretty well so far in April. They bounced at long-term highs on March 31st (matching the highs from 2 weeks prior), but have been descending gently since then. Today's move was definitely modest. The average borrower wouldn't see much of a difference--if any--versus yesterday's rate offerings. But given the rising rate reality of 2021, it's a victory to merely avoid hitting new highs. It's tough to say how long this interlude of stability will last. It could be over soon , or it could be weeks before we get back to recent highs. When it comes to how far rates might fall, it's easier to say that we'd need to see substantial motivation. That motivation could take the form of anything "bad" for the economy or the covid outlook (weaker economic data, lower inflation

Things have been bad for mortgage rates in 2021. That assertion has nothing to do with the outright level of mortgage rates--indeed, that's still very low historically--and everything to do with the pace and duration of the rate spike. Like many things, there comes a certain point at which things have been bad enough for long enough that they can't help but improve. Have we reached that point with the rate spike of 2021 and is today the proof? Let's not tempt fate , and let's be realistic . As far as rate spikes go, there have been worse examples. In fact, even as recently as 2016, one could argue some of that movement was worse than what we've seen in 2021. And if we go back another few years, there's no question that 2013 was much tougher than the current environment. Things can definitely

Mortgage rates have been trying to find a ceiling in the past 3 weeks after rising at the quickest pace in years. That search seemed to be going well until late last week when rates failed to break below the floor that's blocked other recent attempts at progress. The situation deteriorated at the start of the current week with the average lender back in line with long-term highs on Tuesday. We caught a break after that with the average lender showing modest improvements both yesterday and today. How much improvement? Prepare to be underwhelmed. It's far easier to count victories as an "absence of additional defeat" these days and today is no exception. The average lender is still quoting the same rates seen 2 days ago, in fact. So why am I telling you rates are a bit better? The answer has

Mortgage rates moved moderately higher today after failing to capitalize on a hopeful move in bond markets yesterday. Bonds--particularly mortgage-backed bonds--are directly responsible for most of the day-to-day movement in mortgage rates, and they've been losing ground all year. Like several days in the past few weeks, yesterday saw a promising bounce in the bond market. This created some hope that rates had found their ceiling when they hit the highest levels in more than a year 3 weeks ago. After today's moderate increase, however, they're dangerously close to those highs. As of early February, we'd spent nearly 2.5 months with the average 30yr fixed rate near 2.75% for top tier, conventional refis (2.625% or lower for purchases). Today, that rate is in the 3.375%-3.5% range for refinances

There are a few interesting developments for mortgage rates today--especially in light of last week's striking discrepancy between Freddie's weekly survey and the reality on the front lines. Specifically, the Freddie survey finally did a bit more to catch up with reality as it conveyed one the biggest recent jumps to the highest levels reported since early last summer. At the same time, actual rates were having their best week of the year and their first winning week since January 24th. Fast forward to the new week and we may be setting up for a mirror image of last week. In other words, rates were probably low enough yesterday for most of Freddie's survey responses to indicate a decent week-over-week drop when results are released on Thursday. Contrast that to the reality on the street which

The biggest story for the mortgage and housing market so far in 2021 has been the big spike in mortgage rates. It has been more abrupt and covered more ground than all but the worst historical examples. That said, it was always going to happen when the covid outlook improved. For something that was "always going to happen," the rate spike still managed to catch many people off guard. The biggest reason for that was the disconnect between mortgage rates and the bonds that typically dictate mortgage rate movement. There are actually two types of bonds that affect mortgage rates: Treasuries in a general sense, and mortgage-backed bonds specifically. To make a long story short, the pandemic resulted in an unprecedented breakdown in the normal correlations between bonds and rates. The simplest way

It's no secret that 2021 has been a rough year for mortgage rates so far. They've moved higher on all but a few weeks, and exclusively higher if we only count the past 8 weeks (something that hasn't happened in more than a decade , even though there are a few instances of bigger moves overall). In fact, it was that record-tying streak of "bad weeks" that served as the foundation for hope heading into the current week (as discussed here on Monday). In other words, rates have had such a bad run that they were increasingly due to catch a break. Granted, we still have another day to get through, but as of today, this week is very much on track to break the cycle. Yes, rates are LOWER --not just today, but versus the end of last week as well. That's an assertion that runs counter to most media coverage

Mortgage rates put in their 3rd decent performance of the week today amid relatively calm conditions in the underlying bond market. These sorts of winning streaks have been in short supply in 2021--especially since February. Lender pricing was also fairly conservative by the middle of last week as rates moved up to another long-term high. The steady improvement over the past 3 days brings the average lender back in line with rates from Friday, March 12th, and while these aren't big moves in the grand scheme of things, they're better than the recent alternative. To reiterate yesterday's point on the path ahead, much remains to be seen as to whether this is the start of a broader reversal for rates or just another in a long line of false starts. Eventually, one of these friendly bounces will

Mortgage rates moved lower at a decent pace today for the 2nd day in a row. The average lender is still offering the same "note rate" compared to yesterday, but the costs associated with that rate are lower. In other words, "effective rates" (a synthetic rate that accounts for changes in upfront costs, thus allowing us to observe smaller day-to-day changes in the form of an interest rate) are lower. Why distinguish between effective rates and note rates? Simply put, note rates don't tend to move enough to be worth tracking each day (most lenders offer rates in 0.125% increments). During more stable market conditions, we can go weeks or even months at a time without a change in note rates. Effective rates, however, are almost always higher or lower by at least 0.01%. So where does this leave

Today ended up being fairly uneventful for mortgage rates --a welcome reprieve in the context of recent volatility. Actually, "volatility" is putting it mildly. 2021 has been a total rout for longer-term rates, even if 30yr fixed mortgages in the low-to-mid 3% range are historically excellent. That "historical context" argument is good perspective for the casual observer, but precious little consolation to a prospective borrower that saw rates of 2.75% a few months ago and believed the hype that they'd keep going lower. Borrowers seeking loans for investment properties and 2nd homes are finding an increasing supply of drama as recent regulatory efforts have resulted in a majority of lenders making big adjustments to the costs of those loans. In the worst cases, it can cost you more than 7 additional

Despite your thoughts on the term "fake news," we have to talk about it in the context of mortgage rates . It's highly pertinent, even if deception is far from the intention. Thursday is a big day for mortgage rate news because that's when Freddie Mac's weekly mortgage rate survey is published. Why does that matter? Because, while any given lender can do a fine job of tracking their own rates over time, Freddie is one of the only games in town when it comes to capturing a broad average rate offering among multiple lenders. It doesn't hurt that their numbers go back to the 70's and that they're one of the two gigantic housing agencies that see a vast majority of all mortgages in the US move across their desks in some capacity. Over time, reporters have found it easy to simply cover mortgage

Mortgage rates started the day in bad shape after significant bond market weakness overnight. Treasury yields rose roughly 0.05%, and that sort of move typically coincides with mortgage rates rising nearly as much. Today wasn't much of an exception. The average lender started out with effective 30yr fixed rates roughly 0.03-0.04% higher than yesterday, which means they were the highest in a year! Note: when we reference higher "effective rates," it usually means that the costs associated with yesterday's rates have moved as opposed to the rate itself. Those upfront costs provide more of a fine-tuning adjustment. Today's big to-do was the policy announcement from the Fed--not so much because of any expected policy changes, but rather due to the potential extension of a temporary rule that allowed

Mortgage rates rose moderately today, depending on the lender. It's worth noting that lender pricing is exceptionally widely stratified at the moment. In other words, some lenders made big moves today while others did not. Disparity between lenders is nothing new, but the point is that it's been elevated and persistently volatile. This began after the pandemic hit financial markets a year ago this month, but it has ramped up in the past week or so as lenders contend with new restrictions handed down from regulators (via Fannie and Freddie, collectively "the agencies"). Those restrictions limit the amount of certain types of loans that can receive the agencies' stamp of approval. Lenders who were over the limit had to raise rates on those loans abruptly in order to bring their ratios back down

Rising rate headlines are nothing new, but there was a bit of a double whammy this week... or triple, depending on your point of view. Whammy 1: Highest Rates in a Year It's March 2021, and you'd now have to go back to March 2020 to see higher mortgage rates. It will take mainstream media a while to get caught up with this new reality because the most widely cited mortgage rate survey tends to lag behind sharp moves like this. Whammy 2: It's Been a Bumpy Ride And that brings us to "whammy 2." This move has been surprisingly abrupt. Not only have rates risen about as fast as they ever do over the past 2 months, there have also been several false starts where it looked like rates were catching a break only to jump much higher in a single day. Friday was one of those days. The first 4 days of