Mortgage Rate News

Mortgage rates were surprisingly steady today as the bond market reacted to a new policy announcement from the Fed. Perhaps "reacted" is the wrong word considering the market's response. Specifically, the bond market (which dictates interest rates on mortgages and beyond) was hard to distinguish from most any other random trading day. That's nothing short of impressive given what transpired. So what transpired? That requires a bit of background, but let's make it quick. The Fed is currently buying $120 bln / month in new Treasuries and MBS. These purchases greatly contribute to the low rate environment for mortgages. The Fed has done this, off and on in the past since 2009. 2013 was the first major example of the Fed "tapering" its monthly bond purchases after an extended period of accommodation

By the end of last week, mortgage rates moved up to match their highest levels in 2 months. After a modest recovery yesterday, today's rates are little-changed. As is often the case when examining day-to-day rate changes, we're talking about relatively small movements in the bigger picture. The average mortgage seeker would likely be seeing the same "note rate" on almost any day in more than a month now. In the most extreme circumstances, the change would be limited to 0.125% (typically the smallest increment separating different rate offerings for most lenders). When the bond market doesn't justify an entire eighth of a percent, lenders make adjustments via upfront costs/credits. In this way, the "effective rate" is changing every day even if the "note rate" is not. Certain days carry increased

Mortgage rates ended the week at the highest levels in roughly 2 months as investors moved to the sidelines ahead of next week's Fed announcement. In other words, investors sold bonds (among other things) and in the bond market, selling pressure means lower prices and higher rates, all other things being equal. Despite the poor finish, things started out well enough. The Consumer Price Index (CPI), a key inflation report, came out lower than expected on Tuesday. With inflation being an important consideration for the bond market at the moment, the reaction was obvious. Unfortunately, it was also short-lived. If we add S&P futures to the chart above, we can see that stocks were also generally moving to the sidelines (i.e. more sellers than buyers). While there is never one singular motivation

Mortgage rates moved higher again today, bringing the average lender to the worst levels since last Thursday. There are a few exceptions to that due to recent regulatory changes. Specifically, many lenders made improvements to loans for 2nd homes and investment properties. That's the short version. If you need to background, here's the long version . The average loan scenario was unaffected by the regulatory changes and thus was free to react to the day's bond market weakness. Bonds responded immediately to a pair of economic reports that came in much stronger than expected this morning. In general, stronger data pushes bond prices lower and yields (aka "rates") higher. The culprits in this case were the Retail Sales data for August and the Philadelphia Fed's Manufacturing Outlook Survey from

Mortgage rates began the day with promise. Actually, it was the underlying bond market (which largely dictates mortgage rates) was sending promising signals by apparently building on the bigger improvements seen on Tuesday. This is exactly what mortgage lenders needed in order to feel comfortable setting rates at even lower levels. Unfortunately , not long after the day began, bonds started losing ground. For more than a few lenders, the intraday losses were enough to prompt mid-day reprices (meaning that the initially-offered mortgage rates were replaced by slightly weaker terms. A mid-day reprice may or may not be a big deal depending on your perspective. In most cases, the "note rate" for your mortgage quote will remain the same and only the upfront costs will change. In even less threatening

Mortgage rates started the day modestly lower , but many lenders ended up offering mid-day improvements in response to market conditions. When it comes to rates, the bond market sets the tone. Bonds can move for a variety of reasons, but economic data is one of the quintessential inputs. If the incoming data suggests a hotter economy or higher inflation, rates tend to rise . The opposite is also true (weaker data = lower rates) as was the case today. The Bureau of Labor Statistics released the Consumer Price Index for the month of August today. This is one of the more widely-followed inflation reports. As such, rates improved when the report suggested inflation decelerated by more than expected. Rates didn't drop too much, but they're nonetheless back in line with their lower recent levels

Mortgage rates were fairly flat to start the new week. This leaves the average lender in the high 2% range for top tier conventional 30yr fixed scenarios (i.e. 20%+ equity, 740+ FICO, owner-occupied, single-family, detached homes). This is just a bit higher than the all-time lows seen at the beginning of the year when rates were in the mid-2% range. There's disagreement about where we go from here. The easy answer--and probably the more common one--is that rates will gradually move higher as we continue to distance ourselves from the worst days of the pandemic. But that answer actually implies its own counterpoint: a lot depends on covid! Specifically, if the delta-driven case count spike doesn't quietly subside, and more importantly, if cases accelerate into the fall months, rates could remain

Rates are dictated by the bond market and bonds are flashing a warning sign about volatility on the horizon. In other words, rates look like they're ready to make a bigger move in the near future, for better or worse. This isn't readily apparent at first glance--especially when it comes to...

Mortgage rates moved lower again today, with many lenders making it back to the levels seen after last Friday's jobs report. In week-over-week terms, rates were still decidedly higher at the beginning of the day. It wasn't until the afternoon's 30yr bond auction that the entire bond market improved enough for mortgage lenders to offer mid-day reprices. A similar pattern played out yesterday. Why do Treasury auctions matter to mortgage rates? Treasuries and MBS (mortgage-backed securities--the bonds that most directly affect mortgage rates) are both part of the bond market. They correlate quite well for a variety of reasons (not the least of which being that Treasuries are the risk-free starting point against which every dollar-denominated bond investment is measured). As such, when Treasuries

Mortgage rates moved lower today after starting the week by jumping noticeably higher yesterday. Today's gains came courtesy of global growth concerns early in the trading session and a strong 10yr Treasury auction during domestic market hours. This morning's mortgage rates weren't too much better than yesterday's, but several lenders offered mid-day improvements after the Treasury auction. Lenders who held firm would likely improve tomorrow morning unless overnight market drama undoes today's gains. Why do Treasury auctions matter to mortgage rates? Treasuries and MBS (mortgage-backed securities--the bonds that most directly affect mortgage rates) are both part of the bond market. They correlate quite well for a variety of reasons (not the least of which being that Treasuries are the risk

It was a busy week for economic data with several reports that were pertinent to the housing market. In addition to being the perennial top dog among economic reports, this Friday's jobs report was especially important due to its role in the Federal Reserve's decision-making process. The Fed is widely expected to announce a forthcoming reduction (aka "tapering) of its bond buying program by the end of the year. If the jobs report had been strong enough, investors thought the Fed might make the announcement a few weeks from now at the September policy meeting. But the strength of the jobs report is a matter of great debate. As far as the headline job tally is concerned, Nonfarm Payrolls (NFP) came in at 235k versus a median forecast of 728k. That's a big miss! Poll a hundred market strategists

Mortgage rates are based primarily on bonds. Bonds take cues from economic data (among other things). And tomorrow's big jobs report is the most consistently important piece of economic data each month as far as the bond market is concerned. This logically means that there is an increased risk of volatility tomorrow. Compounding the issue is the fact that the Fed is also paying careful attention to labor market data as they wait for evidence of enough progress to begin tapering their monthly bond purchases. The Fed's bond buying program is a key reason that rates are as low as they are. Although the market is widely expecting a tapering announcement by the end of the year, the timing of the announcement would have a noticeable incremental effect on rates. Without any big ticket data or headlines

Much like yesterday, mortgage rates were unchanged to slightly higher , depending on the lender. And once again, the differences in pricing strategies depend on timing in conjunction with yesterday's pricing decisions. Lenders who reacted to yesterday afternoon's bond market losses by raising rates were able to offer flat to slightly lower rates today. Every other lender was either flat to slightly higher. As is often the case, we're talking about incredibly small movements in the bigger picture (because mortgage rates don't reliably move enough to be worth measuring in day-over-day terms). Prospective borrowers are likely to see the exact same rate quotes as yesterday. The only differences would be modestly higher or lower upfront costs. The average lender is still able to offer top tier conventional

Mortgage rates were unchanged to slightly higher today, depending on the lender. The differences in pricing strategies stem from the timing of changes in the bond market. Mortgage lenders set their rates based on the prices of mortgage-backed securities (MBS), which change constantly throughout the day. Despite those changes, there's often enough stability for lenders to "set it and forget it." On days where MBS move more than normal, lenders can change their mortgage rate offerings in the middle of the day. In today's case, those changes were just getting to be too big to overlook right at the end of the trading day. As such, only a handful of lenders opted to make any changes and even then, those changes were fairly small. The implication is that rates should be slightly higher tomorrow morning

Mortgage rates drifted lower again today, with the average lender getting back down to the lowest levels since the first week of August. In a general sense, today's friendly rate momentum represented follow-through momentum after Fed Chair Powell soothed the market on Friday morning. Both stocks and bonds improved as Powell said that he had been considering tapering the Fed's asset purchase program this year, but the surge in covid cases due to the delta variant complicated the outlook. The Fed's asset purchases help rates stay lower than they otherwise might be and rates are expected to rise a bit when the Fed finally pulls the trigger on tapering. All that having been said, the Fed's decisions are ultimately dependent on economic data. Specifically, the labor market needs to show that it

Mortgage rates stabilized today after moving higher at a moderately quick pace over the past 2 days. To be sure, today's rates are definitely higher than those seen at the end of last week, despite numerous headlines to the contrary. The headlines in question are based on Freddie Mac's weekly rate survey which is published on Thursday morning, but tends to capture week-over-week rate movement between Monday and the previous Monday. That ended up being a very favorable comparison this time around. The rising rates of the past 2 days conclusively changed the game. Why are rates rising though? Rates are dictated by the bond market. As bond prices fall, yields rise, and higher yields coincide with higher rates (indeed, "yield" is simply market jargon for "rate"). While motivations to buy and sell

Mortgage rates are only adjusted once per day by default. From there, the underlying bond market would need to improve or deteriorate by a certain amount for the average lender to go to the trouble of a mid-day reprice. A small handful of lenders did that last Friday (bonds were deteriorating), but the losses were small enough to avoid forcing most lenders' hands. By abstaining on Friday, the average lender was forced to adjust today's rates slightly higher to account for the bond market weakness. In other words, this morning's rates were higher than Friday morning's. As the day progressed, mortgage bonds improved enough for a friendly mid-day reprice. A majority of lenders pulled the trigger, thus helping rates close the gap with Friday's rates. Simply put, rates started the day moderately

Rates are on hold until the next chapter is written in the complex saga of covid versus the market. This isn't to say rates perfectly flat--simply that the prevailing momentum has been sideways for the past few weeks. Since mortgage rates only change once or twice a day, we can use 10yr Treasury yields to see finer detail. This entire week took place in the fairly narrow range of 1.29 to 1.21, and it ended with yields precisely in the middle at 1.25%. Zoom out a bit and 1.25 remains at the center of a slightly wider (but still very "sideways") range. What's the point? Bonds (and thus "rates") are muddling through a period of indecision as they wait for clarity. Bonds ultimately care most about things like the economy and Fed policy. In turn, the economy and the Fed have a lot riding on the

Mortgage rates were slightly lower today as the bond market improved for the 2nd straight day. When bonds prices move higher, bond yields (or rates) move lower, all other things being equal. In the current case, bonds were generally cautious heading into yesterday's reading of the minutes from the most recent Fed meeting ( read more ), but have been bouncing back ever since. All that having been said, the movement has been fairly gradual. The average mortgage borrower may not even see any different between yesterday and today's rates. That's because mortgage lenders typically offer rates in 0.125% increments, and it takes quite a bit more movement in the bond market for rates to change that much. But alas! I just told you rates improved slightly! What's up with that? There are two ways to look

Mortgage rates haven't been skyrocketing, by any means, but they have been moving up in fits and starts over the past 2 weeks. Today was just another page in that story despite a relatively friendly reaction to the Fed Minutes. What are the Fed Minutes? Well may you ask! If you're familiar with the notion of "meeting minutes," that's basically what we're dealing with. In the Fed's case, the minutes offer a robust recap of the discussion that takes place during the Fed policy meetings. These can be extraordinarily important events for financial markets--especially the bond side of the market (bonds dictate interest rates, including those for mortgages). Even though the most recent Fed meeting was 3 weeks ago, traders are nonetheless anxious for any clues about future Fed decisions. In today