Mortgage Rates

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Updated: 31 min 57 sec ago

Here's Why Rates Were Flat This Week (And Why That Should Change)

Fri, 2019-10-18 23:17
Mortgage rates were flat today. In fact, they were very close to being flat on the week for that matter! This is a reflection of the bond markets current set of concerns, which really came into focus late last week with Thursday's Brexit-related news and Friday's trade deal updates. Brexit refers to the UK's attempts to exit the EU. As esoteric of a concern as that may seem, it's something that the bond market (and hence, interest rates) quite clearly cares about. Last Thursday's unexpected progress between Boris Johnson and Northern Ireland's Prime Minister sent rates screaming higher at their fastest pace in months. I could also argue that much of the damage that seemed to have been done by Friday's US/China trade news was instead follow-through momentum from Thursday's Brexit-inspired move

Mortgage Rates Face Volatility Thanks to an Old Friend

Thu, 2019-10-17 21:24
Mortgage rates didn't do much today, but risks are increasing that movement will be more brisk in the coming business days. Blame European politics--specifically: Brexit. This isn't the mortgage rates' world first go-round with the U.K.'s lengthy process of exiting the European Union (aka "Brexit"). In fact, Brexit was the single biggest factor that helped drive rates down to the long-term lows seen in 2016. For most lenders, those rates were close enough to the all-time lows seen in 2012. The fact that they were available in the middle of the summer homebuying season only made things better for the housing market. Thanks Brexit! More than 3 years later and the U.K. is set to run into yet another deadline for its divorce from the EU. This one has been on the radar for months, but it's been

Mortgage Rates Little-Changed Near Recent Highs

Wed, 2019-10-16 23:30
Mortgage rates improved modestly today, depending on the lender. Some lenders moved rates higher yesterday due to deterioration in the bond market. Others simply planned to adjust for market conditions this morning. If we look at the last 3 days altogether, however, it's easier to characterize rates as being right in line with the highest levels in nearly a month. Volatility remains a risk in the near-term future, but not for conventional reasons. Normally, economic data and Fed policy would be responsible for the biggest moves in the bond market that underlies mortgage rates. At the moment, however, geopolitical risks and US/China trade policy updates can have an impact that's just as big. There was fresh evidence of this today when Brexit-related updates offset the influence of a key piece

Mortgage Rates Turn Higher After a Strong Start

Tue, 2019-10-15 21:58
Mortgage rates ended higher for the 4th straight business day on Tuesday, but that wasn't necessarily destined to be the case this morning. After last week's US/China trade announcements put upward pressure on rates heading into the 3-day weekend, some of the positivity was backtracked over the weekend. This pushed stock prices and bond yields (aka "rates") lower to start the day, but the rate recovery didn't last long. As news came in about improved odds for a Brexit deal, European bonds began losing ground quickly. This, along with a strong performance in US stock markets, put pressure on US bonds throughout the morning (pressure on bonds = higher rates). By the end of the day, most mortgage lenders had reissued rates that were closer to last Friday's . Tomorrow brings the week's only major

Highest Mortgage Rates of the Month or Lowest in a Month?

Thu, 2019-10-10 23:23
Mortgage rates were sharply higher today as the underlying bond market faced heavy selling pressure for a variety of reasons. When investors are more interested in selling bonds, prices move lower and yields (aka RATES) move higher. By the end of the day multiple lenders had recalled their rate sheets and reissued higher rates. The average lender was easily at the highest rates of the month. Despite all of the above, multiple sources claim rates fell significantly this week and are now at the lowest levels since September 12th. Sadly, that's not true. It's the product of confusion that often happens on Thursdays when Freddie Mac's weekly mortgage rate survey is released. The survey mainly reflects lenders' rate offerings from Monday and Tuesday. Because mortgage rates can also move quite a

Mortgage Rates Almost Hold Ground Despite Volatile Bond Market

Wed, 2019-10-09 22:35
Mortgage rates moved modestly higher today, but remain very close to the lowest levels in nearly a month. The underlying bond market (which dictates rates) has been somewhat volatile this week on a combination of trade-related headlines and comments from Fed Chair Powell. Traders also have an eye on recent market trends in conjunction with this week's bond market auctions. All of the above have added up to plenty of back and forth movement, but no sustained trend in one direction or the other. Even then, we're not talking about huge swings for the average mortgage lender. Most prospective borrowers would barely see a detectable difference from one day to the next. Eventually, that will start to change when the next bout of momentum sets in. As for the reason that mortgage rates haven't felt

Mortgage Rates Back in Line With Recent Lows

Tue, 2019-10-08 22:25
Mortgage rates were slightly lower today despite some volatility in the underlying bond market. Rates have generally been moving lower recently, but the trend of improvement looked like it might have been running into some resistance yesterday. While today's drop isn't big enough to suggest complacency, it does make a case for slightly less defensiveness in the short term. In the bigger picture, however, it's good to keep in mind that rates are the lowest they've been in almost a month. Early September was still a bit better, but those were the lowest rates in more than 3 years. Volatility remains a risk as every update regarding a potential trade deal seems to have an easy time pushing the bond market around. When bonds improve or deteriorate enough during any given day, lenders can issue

Mortgage Rates Might be Hitting Some Resistance

Mon, 2019-10-07 22:50
Mortgage rates moved lower every week for the past 3 weeks. They covered a respectable amount of ground during that time and ultimately erased most of September's damage by Friday afternoon. In outright terms, September's weakness pushed the average 30yr fixed rate quote roughly 3/8ths of a percentage point (.375%) higher. The past 3 weeks have helped to claw back roughly 0.25% of that. Because of that relatively decent and relatively sustained winning streak, there's a risk that rates will hesitate to make any further improvements this week. Today's modest weakness serves as a softly-worded warning to that effect, but we'd need to see several more days of higher rates in order to confirm that sort of upward momentum. As of today, it's a risk to keep an eye on. Loan Originator Perspective Bond

Mortgage Rates Closing in on Multi-Year Lows

Fri, 2019-10-04 20:54
Mortgage rates fell nicely this week with modest to moderate gains throughout. As I noted yesterday, this runs counter to the week's average mortgage rate headline, which claims flat to slightly higher rates versus last week. Those claims aren't wrong, they just only really apply to Monday and Tuesday of this week versus the same two days last week. With the benefit of more timely mortgage rate info, we see the average lender at the lowest levels in nearly a month, and steadily closing in on the multi-year lows seen during the first few days of September. Rates (and many other parts of the financial market) are intently focused on economic data. Weaker reports on the manufacturing and services sectors helped facilitate most of this week's drop. Traders will continue reacting to any major reports

Rates Are Still Falling, But Not Precipitously

Wed, 2019-10-02 22:22
Mortgage rates are historically quite low and they managed to continue lower today . This is in addition to a steady string of improvements that began more than 2 weeks ago. But whereas other parts of the financial market are making some of the biggest moves in months right now, the mortgage market is barely moving by comparison. The reason for this is the same as it has been every time we've discussed it in the past few months. The bonds that underlie mortgage rates are not able to keep pace with the broader bond market when things get volatile. The bigger the move and the more rates vacillate between strength and weakness, the worse it is for the mortgage market. Volatility doesn't show signs of stopping , but as always, it will depend on the news and data in the coming days. Both tomorrow

Mortgage Rates Much Lower After Manufacturing Report

Tue, 2019-10-01 22:27
Mortgage rates were already at their lowest levels in a few weeks by yesterday afternoon--a journey that largely consisted of baby steps. There have been a few days that have seen more movement than others and today certainly qualified, thanks to an incredibly weak manufacturing report. What does a manufacturing report have to do with mortgage rates? As today shows us, quite a lot! The bond market that underlies interest rates has always been in the business of reacting to economic data. Some reports and some periods of time are more important than others. Data is currently a bit more important than it has been and manufacturing data has more of the spotlight than normal due to the trade war's impact. The underlying bond market actually began the day suggesting HIGHER rates, and indeed, many

Mortgage Rates Lowest in Weeks

Mon, 2019-09-30 22:44
Mortgage rate movement was fairly uneventful last week. The bond market (which is most directly responsible for driving day-to-day changes in mortgages rates) was focused on consolidating, meaning the gaps between lows and highs were getting smaller and smaller. At the same time, there wasn't significant movement in the average trading prices of the bonds that underlie mortgages. In other words, rates were mostly sideways for much of the week. Over the past few business days, the sideways momentum gradually began to give way to modest improvements. Lenders have been slow to adjust their rate sheet offerings, but as of today, the average lender is back in line with its lowest rates since September 9th . More than a few lenders offered mid-day improvements today. Those who didn't will be able

Much Calmer Day For Mortgage Rates

Thu, 2019-09-26 21:30
Mortgage rates held steady today--a welcome development after yesterday's move higher. In the bigger picture, rates have done an acceptable job of moving back down after spiking at the fastest one-week pace in years 2 weeks ago. The entirety of last week was spent moving lower. Now this week's theme seems to be best described as holding steady. To quantify the timeline described above, the big spike in rates earlier this month took the average lender .375% to .50% higher in rate from the long term lows seen at the beginning of the month. Last week's improvements have only allowed lenders to drop rates by about .125% from those recent highs. The bond market (which dictates rates) is on the lookout for cues from two key sources at the moment. On the one hand , unscheduled, unexpected headlines

Mortgage Rates Change Course, Head Higher

Wed, 2019-09-25 23:11
Mortgage rates bounced higher today, after making it to the best levels in more than a week yesterday afternoon. Markets responded to a strong home sales report and political headlines. The net effect was upward pressure on stock prices and interest rates. Much like yesterday, most of the movement in rates was seen in US Treasuries, but the average mortgage lender was not immune. The net effect is the h ighest 30yr fixed rates of the week , but that sounds a bit more ominous than it is. The timing of yesterday's market movement worked in our favor as the average lender hadn't fully accounted for the improvement in bond markets by the end of the day (bond market improvement implies lower rates). That left a bit of a cushion for today's rates. In other words, they didn't have to move too much

Mortgage Rates Manage to Hold Near Weekly Lows

Tue, 2019-09-24 22:37
Mortgage rates managed to hold on to the improvements seen yesterday. This was far from a certainty yesterday afternoon as the underlying bond market had ebbed into weaker territory after hitting much stronger levels earlier in the day. The timing was such that most lenders simply waited for this morning to adjust rate sheets in a modestly unfriendly direction. But that likelihood depended on the bond market remaining at yesterday afternoon's levels. It didn't. As the day progressed, bonds improved. The biggest jump followed weaker economic data in the form of the Consumer Confidence report at 10am ET. Bonds continued to benefit from investors seeking safe havens as the stock market moved lower at its fastest pace in a month . All of the above leaves the mortgage market in essentially the opposite

Great Day For Mortgage Rates, But There's a Catch

Mon, 2019-09-23 23:18
Mortgage rates added to last week's friendly rebound with their best single-day drop in more than a month today. Weak economic data in Europe and tepid domestic data helped drive demand in safe-haven bond markets. Higher bond market demand means lower rates, all other things being equal. But it can take some time for movement in the bond market to translate to changes in mortgage lenders' rate sheets. Most of today's improvements were due to bond market gains that were already in place by this morning. As the day progressed, bonds drifted back in the other (less friendly) direction. When that sort of drift results in enough bond market movement, mortgage lenders can change their rate offerings in the middle of the day. Several of them did so today. Those who didn't will be more likely to offer

Mortgage Rates End Week Near Best Levels

Fri, 2019-09-20 23:14
What a difference a week makes! At the end of last week, things were pretty grim, with mortgage rates having just seen their worst single week since 2013. The uplifting caveat at the time was that such bouts of nastiness are not that uncommon in the wake of ultra strong performances (such as the entire month of August--the best single month since 2002 if you can believe it!). In other words, last week was a correction to August's impressive strength. With that in mind, this week turned out to be a correction to last week's correction! There was no way to be sure, but we were hoping it was overdone and that bond traders would step in to buy bonds (which pushes rates lower) in response to the big move. That's exactly what happened and it resulted in measured improvements throughout the week.

Think The Fed Cut Mortgage Rates? Think Again

Thu, 2019-09-19 22:44
Here is exactly what yesterday's Fed rate cut did to mortgage rates: ABSOLUTELY NOTHING! No Fed rate cut (or hike) will EVER do ANYTHING directly to mortgage rates because the Fed doesn't set mortgage rates. Don't let the caps-lock fool you into thinking I'm some angry guy with a keyboard who's simply ranting for some self-serving purpose. Of all the people you'll talk to today and of all the articles you'll read on this topic, you should trust me the most. I don't say that lightly or very comfortably, for that matter. It sounds terribly cocky, but in this case, it's also terribly honest. For more than a decade, if markets are open and mortgage companies are quoting rates, I've religiously been tracking trends, patterns and plain old boring statistics. I use actual wholesale rate sheets from

HIGHER Mortgage Rates Despite Fed Rate CUT. Here's Why

Wed, 2019-09-18 22:48
One of the greatest potential sources of confusion for prospective mortgage borrowers is the relationship between the Fed and mortgage rates. While the Fed's policy changes absolutely have a big impact on all sorts of interest rates (including mortgages), a drop in the Fed's policy rate DOES NOT result in lower mortgage rates. In fact, the OPPOSITE was true today. The main reason for confusion is the fact that there's a huge difference from an investment standpoint between a rate that governs the shortest -term transactions (The Fed Funds Rate applies to loans that last for 1 day or less) and a rate that can remain in effect for up to 30 years in the case of mortgages. Even if we use the average life span of a 30yr fixed mortgage, we're still talking about 5-10 years depending on the broader

No, The Fed Rate Cut Won't Affect Mortgage Rates

Tue, 2019-09-17 23:24
Mortgage rates have risen rather abruptly from their long term lows 2 weeks ago and are now at the highest levels in more than a month. Fortunately, the average lender is still easily able to quote rates in the high 3% range, which is still a significant savings for anyone who bought or refi'd in 2018 and even the first part of 2019. That's great and all, but what have rates done for us lately? More importantly, what are rates going to do in the future? Unlike forecasting the weather, the more of an expert someone is in the mortgage world, their ability to predict the direction of rates doesn't meaningfully diverge from the layperson's best guess. What we do know is that tomorrow's Fed announcement is a big potential source of volatility, but NOT for the reasons most laypersons may assume!

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