Mortgage Rates

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Updated: 1 hour 14 min ago

Mortgage Rates Hold Relatively Steady Despite Bond Market Weakness

Mon, 2019-08-19 22:59
Mortgage rates mostly held steady today , despite a move higher in broader interest rate indicators like the 10yr Treasury yield. Treasuries and mortgage rates typically track each other quite well, but that relationship has broken down in recent weeks due to the rapid drop in rates and the increase in volatility. The mortgage sector has a much tougher time adjusting to new realities compared to Treasuries. In other words, mortgage rates haven't been able to move lower nearly as quickly (though they have still managed to hit their lowest levels since 2016). The upside to that problem is that we get days like today where Treasury yields rebound without significantly damaging mortgage rates. In fact, many lenders are offering the same rates seen on Friday. Loan Originator Perspective Bond markets

Mortgage Rate Weirdness May Be Working in Your Favor Today

Sat, 2019-08-17 01:04
Things have been weird enough for mortgage rates recently that we were forced to add a " Temporary Note on Mortgage Rate Inconsistency " to our daily coverage recently. It will likely return before too long, but with a few edits for clarity. Edits will also need to account for days like today, which offered a prime example of how the inconsistency can be corrected. There's a decent chance those first 3 sentences are confusing and/or relatively meaningless, so let's change that! Mortgage rates aren't the only rates out there. They exist in an ecosystem with more established players like US Treasury yields. They move so much like Treasury yields that even very smart people mistakenly believe Treasuries (specifically, the 10yr) dictate mortgage rates. Recently though, mortgage rates have moved

Mortgage Rates Fall Back Down to 3-Year Lows

Thu, 2019-08-15 22:35
Mortgage rates fell today as the underlying market for mortgage-backed-securities (MBS) actually did a better job of keeping pace with broader bond market gains--not something they've been doing very well lately! For some lenders, it was enough to get them back to August 6th's levels, which were the best in nearly 3 years. The average lender can quote a conventional 30yr fixed rate of 3.625% for top tier scenarios. That said, there is much more variability between lenders at the moment. Take a look at the " Temporary Note on Mortgage Rate Inconsistency " below to learn more about why things have been volatile and inconsistent. There's no reason to expect broader market volatility to suddenly disappear, but as long as Treasury yields don't undergo a massive spike, the mortgage market should

Mortgage Rates Are a Mess!

Thu, 2019-08-15 00:00
Mortgage rates were unchanged for many lenders today which is utterly and completely shocking given the other market developments that tend to coincide with rates moving lower. Specifically, stocks tanked and 10yr Treasury yields plummeted to the lowest levels since September 2016. For anyone under the impression that 10yr yields dictate the direction of mortgage rates without exception, it's high time to reassess that worldview. The bottom line is that rates are doing an absolutely terrible job of keeping pace with the rally in the broader bond market. The " Temporary Note on Mortgage Rate Inconsistency " below will be informative in that regard. With that in mind, many lenders were unchanged today for slightly less complicated reasons. Sure, underlying mortgage bonds didn't improve as quickly

Mortgage Rates Jump After Tariff Delay

Tue, 2019-08-13 23:48
Mortgage rates were still unchanged for many lenders as of this morning. There were even a few offering slightly lower rates compared to yesterday morning's offerings. That was a welcome development considering broader bond markets (which generally dictate rates) were pointing toward higher rates at the time. This can be explained by the inconsistent behavior of the mortgage market with respect to US Treasuries (and/or "the broader bond market") discussed in greater detail in the temporary "note on mortgage rate inconsistency" below. Today's iteration had more to do with the volatility component as bonds were somewhat rocked by headlines regarding the delayed implementation of several recently announced tariffs. If the announcement of tariffs was good news for rates 3 weeks ago, the delay is

Mortgage Rates Miraculously Flat Despite Massively Lower Treasury Yields

Mon, 2019-08-12 23:49
Mortgage rates were unchanged to slightly higher today--a claim that utterly boggles the mind of anyone who thought they understood the relationship between bond markets and the mortgage world. ALMOST without fail, a big drop in 10yr Treasury yields will coincide with lower mortgage rates. In fact, many people believe (albeit incorrectly) that mortgage rates are based on the 10yr yield. But today, despite a substantial drop in Treasury yields, mortgage rates are stuck in the mud. Since this could continue to be the case, I'm going to include the following brief statement/reminder until the situation subsides: A note on mortgage rates not improving even when 10yr yields are falling: Mortgages and the bonds that underlie them (MBS) are subject to one major uncertainty that doesn't affect US Treasuries

Here's Why Mortgage Rates Dropped Even Though Markets Disagreed

Fri, 2019-08-09 21:52
Mortgage rates moved lower today even though the broader bond market suggested they should have remained flat or higher. In several of this week's previous articles, we've discussed the volatility that's been wreaking havoc on the world of mortgage rate setting for lenders. Simply put, when the moves get bigger and when the direction changes more frequently, mortgage rates take extra damage relative to Treasury yields (a risk-free benchmark for most any other rate in the US). Conversely, when rampant volatility begins to ebb, lenders are able to repair some of that damage. The steadier the broader bond market can remain, the more we may see mortgage rates fall , even if outright trading levels aren't suggesting as much of an improvement. More simply put, the 10yr Treasury yield is at 1.738

No, Mortgage Rates Are No Longer "Sharply Lower" This Week!

Thu, 2019-08-08 22:11
Mortgage rates were sharply higher today, with the average 30yr fixed rate quote rising by almost an eighth of a percentage point in some cases. A move of that magnitude in one day is the sort of thing that only happens a few times a year. Surprisingly, a multitude of headlines claim that rates are sharply LOWER this week. What gives?! If you happened to catch yesterday's rate commentary , you already know where this is going. There's an over-reliance on the part of major media outlets (and even in some corners of the mortgage industry itself) on the weekly mortgage rate report from Freddie Mac. Freddie is transparent about the limitations of its data. They'll be the first to tell you that most of the responses come in on Tuesday and that responses are only collected on the first 3 days of

Warning: Tomorrow's Mortgage Rate News Will be Wrong

Thu, 2019-08-08 01:01
Mortgage rates have had a great week. Although rates are slightly higher today versus yesterday, they're still exceptionally close to the lowest levels since November 2016. That's actually been the case since late last week as more than half of the improvement in underlying bond markets (which dictate rates) was in the books by Friday afternoon. It took lenders a few days to get caught up with the market movement, but by yesterday afternoon and this morning, top tier scenarios were seeing rate quotes of 3.625% in many cases (25%+ down, perfect credit, etc). Tomorrow will bring a raft of mortgage rate headlines from major news outlets due to the typical Thursday release of the widely-followed Freddie Mac Primary Mortgage Market Survey. Those stories will all be wrong . How can I be so sure?

Lowest Rates Since November 2016

Tue, 2019-08-06 23:54
Mortgage rates hit their lowest levels since November 2016 late last week and they've proceeded to set a new long-term low each day since then. Today was no exception. That's fairly surprising at first glance, considering the underlying changes in the mortgage-backed securities (MBS) that most directly affect mortgage rates. Typically, when I bring up MBS prices, it's to highlight a discrepancy between the movement in Treasury yields and mortgage rates. Many relatively savvy market-watchers and consumers mistakenly believe US Treasuries dictate mortgage rate movement when in fact, that' the job of MBS. It just so happens that MBS and Treasuries tend to move in lock-step. When they don't, we can see mortgage rates diverge from Treasury yields by small amounts. Today, however, MBS indicated higher

Just When You Thought Rates Wouldn't Go Any Lower

Mon, 2019-08-05 21:53
Mortgage rates were already in great shape on Friday after having fallen to the lowest levels since November 2016. Rather than draw inspiration from the week's big ticket events (Fed announcement and jobs report), the biggest source of inspiration was a flare-up in trade tensions following Trump's announcement of new tariffs on Chinese imports. Trade war drama flared over the weekend as China's central bank set the country's currency at the weakest levels in more than a decade. What does Chinese currency have to do with US mortgage rates? Quite a lot, really! The outright level of Chinese Yuan versus the US dollar is not what's important here. Rather, it was the fact that such a move was directed by the Chinese government in an obvious retaliation to Trump's trade war escalation. In other words

Mortgage Rates Drop to New Multi-Year Lows

Sat, 2019-08-03 00:59
Mortgage rates fell again on Friday as lenders finally saw recent bond market gains stabilize enough to act on. In other words, lenders don't always keep their mortgage rate offerings moving in lock-step with the underlying bond market (which dictates rates over time). This helps protect them from potential volatility, which ultimately allows them to keep rates lower than they otherwise would be (volatility is costly in the mortgage rate world). Yesterday's bond market movement was big and unexpected. It took 10yr Treasury yields to the lowest levels since November 2016. Mortgage rates weren't able to say the same until today. Interestingly enough, the bonds that specifically underlie mortgages failed to make any major improvement today (which is an entire piece of analysis unto itself). That

Mortgage Rates Are Actually Much Lower Today

Thu, 2019-08-01 21:06
Mortgage rates fell today, but by how much depends on the lender! This runs contrary to the average news story which contains some reference to rates being flat week-over-week (due to Freddie Mac's weekly rate survey data, which unfortunately doesn't account for big market movement on Thursdays and Fridays). There was a better case to be made for such things yesterday as the Fed drew a mixed reaction from the bonds that underlie mortgages. If you didn't catch it, yesterday's article is highly recommended for those who want to understand why the Fed rate cut had no effect on mortgage rates. HERE IT IS . One of the takeaways in that article is that rates would be dependent on economic data and developments, and that there were a few big-ticket items left this week. One of those was today's ISM

No, The Fed Didn't Cut Mortgage Rates!

Thu, 2019-08-01 01:06
Mortgage rates were mostly unchanged today, which will come as a surprise to scores of consumers who mistakenly believe the Fed's 0.25% rate cut equates to a 0.25% drop in rates. The Fed does not set mortgage rates! Actually, to be fair, the Fed Funds Rate (that thing everyone is talking about today) is in fact the basis for Home Equity Lines of Credit (HELOCs) in many cases, but that's it as far as the mortgage world is concerned. The most common mortgages are determined by other parts of the financial market. In fact, mortgages actually "turn into" securities that are traded in financial markets as a part of the process that makes them safer and easier for investors to buy. Those securities trade just like other securities, for the most part (e.g. stocks, bonds, etc.), and it's the price

Mortgage Rates Stay Calm Before Tomorrow's (Potential) Storm

Tue, 2019-07-30 22:09
Mortgage rates haven't moved much this week, or last week, or the week before that. In fact, for the average prospective borrower, there haven't been any major changes since first making it down to the multi-year lows in June. That said, there has been enough volatility to matter. Today wasn't a great example of that, but tomorrow or one of the two days that follows, may be. In addition to some more significant economic reports coming out in the morning, tomorrow brings the Fed rate decision. To be fair, the Fed's decision has already been made, best anyone can tell. A 25 basis point (0.25%) rate cut is basically guaranteed. That might seem like a good thing for mortgage rates, but the benefits have already been reaped. Tomorrow's market movement depends more on the economic data and the specifics

Mortgage Rates Start Slow, But Risks Increase Throughout The Week

Mon, 2019-07-29 21:43
Mortgage rates moved back down , albeit just slightly, into last week's range. They'd risen for 2 straight days by Friday, and today's improvement leaves them closer to Wednesday's levels. That assessment requires a bit of clarification, however. Rate movement can refer to changes in the actual interest rate that determines the monthly payment amount of a mortgage. But there are other upfront fees and credits that affect the overall cost of financing. For example, if you are being quoted a lower rate than anyone else, but have to pay thousands of dollars to get that rate, you might not be saving any money over time. Changes in those upfront costs happen far more readily than changes in the actual interest rates (technically referred to as "note rates"). Today was definitely not big enough to

Big Week Ahead For Mortgage Rates

Fri, 2019-07-26 22:13
Mortgage rates edged just slightly higher today for the average lender, marking the 2nd day of weakness this week. In terms of the underlying bond market, however, today was purely an extension of yesterday's trading patterns that began shortly after rates rose in response to the press conference with European Central Bank (ECB) President Mario Draghi. When we talk about "rates" rising in response to Draghi, it can mean one of two things. As far as the average mortgage borrower is concerned, it can refer to the generally higher mortgage rates yesterday. But "rates" can also refer to the yields on various bonds that trade throughout the day. Whereas mortgage rates might only be adjusted a few times per day at the most (and typically not at all), bonds are moving hundreds to thousands of times

Mortgage Rates Bounce Higher Thanks to Europe

Thu, 2019-07-25 20:58
Mortgage rates were moderately higher today marking the first detectable shift of the week. Many of the market participants who trade the bonds responsible for rate movement had been waiting to see what the European Central Bank (ECB) had to say in its policy announcement today. Although the announcement itself was rate-friendly, traders felt that ECB President Mario Draghi wasn't rate-friendly enough in the subsequent press conference. Bonds quickly began losing ground as Draghi spoke early this morning. The weaker levels ( which imply higher rates ) were already in place by the time most mortgage lenders generate their first rate sheet of the day. As such, most lenders were quoting higher rates right out of the gate. The good news is that "higher rates" may not mean the same thing to you

Mortgage Rates Unchanged Again, But That's Less Likely Tomorrow

Wed, 2019-07-24 20:54
Mortgage rates barely budged today, with the average lender offering almost the exact same terms as yesterday. That took some doing in the form of strength in the underlying bond market. As of yesterday afternoon, bonds were at their weakest levels of the day, thus implying today's rates would be higher unless overnight market movement was much friendlier. That's exactly what happened thanks to extremely weak economic data in Europe. Economic weakness promotes strength in the bond market, which in turn pushes rates lower . Naturally, European data had the biggest benefit for European bonds, but there tends to be some spill-over between the world's biggest bond markets. In today's case, the benefit to the US bond market was big enough to erase yesterday afternoon's weakness, thus preventing

Mortgage Rates Hold Steady Despite Bond Market Weakness

Tue, 2019-07-23 23:09
Mortgage rates side-stepped today, bringing an end to a gentle but consistent move lower over the past 5 business days. During that time the average conventional 30yr fixed rates for top tier scenarios fell about an eighth of a percentage point (0.125%). While that only translates to about $7 per month for every $100k financed, it's a pretty decent move historically speaking. Today's bond market momentum suggests the move could be in jeopardy. Bonds are the most direct source of inspiration for mortgage rates, and indeed, for rates in general. The 10yr Treasury yield tends to track mortgage rates exceptionally well, and it was roughly 0.03% higher today. The average lender, on the other hand, didn't change mortgage rates at all. This has to do with the separate set of bonds specifically tied