Mortgage Rates

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Daily Mortgage Rates Update Archive Description
Updated: 29 min 21 sec ago

Rates Reacted to Jobs Report, But Not Like You'd Expect

17 hours 17 min ago
Once a month, the government releases the Employment Situation, also known as "the jobs report." No other piece of economic data is as consistently relevant for the bond market and, thus, interest rates. For most of the past year, the normal correlation between jobs and rates was on hold. That makes sense, of course. Initial lockdowns completely obliterated the labor market and we've been waiting to see how it would recover and how it would be reshaped ever since. In the past 1-2 months, the bond market has finally shown some willingness to react to economic reports. Notably, last month's exceptionally strong jobs numbers put obvious upward pressure on rates. Because of that, anticipation was high for this week's report. Indeed, there was a very big reaction . Economists were expecting the

Mortgage Rates Are Low and Stable, But Face Bigger Risks Tomorrow

Thu, 2021-05-06 21:35
Mortgage rates moved lower today, bringing the average lender to the best levels since late February. Despite the milestone, the day-over-day movement in rates has been pretty mild. Most lenders are making changes that are only noticeable in the form of upfront costs (aka "points") as opposed to rates themselves. If we use upfront costs and rates to extrapolate an "effective rate," the average movement has been 0.01-0.02% on any given day. Rates have been more likely to move lower vs higher in the past 6 days, but that creates some risks in and of itself. Market participants who trade the securities that underly mortgage rates tend to shy away from additional buying once these winning streaks get to be more than 7 days long. With all of the above in mind, our potential 7th winning day in a

Mortgage Rates Sideways Near 2-Month Lows

Wed, 2021-05-05 21:19
Mortgage rates were mixed today, depending on the lender. On average, rates were unchanged and remained very close to their lowest levels in nearly 2 months. The bond market (which most directly impacts day-to-day rate movement) was calm. Both of today's important economic reports came in weaker than expected, but close enough to forecasts to prevent significant volatility. Beyond that, questions remain about just how ready the bond market may be to react to economic reports in general (historically one of the quintessential reaction functions in financial markets). If bonds aren't quite ready to link back up with economic data yet, it would be an issue of timing and priorities . Several Fed speakers reminded us today that we're still a long way from even being able to assess the post-pandemic

Mortgage Rates Fairly Steady Near Recent Lows

Tue, 2021-05-04 21:52
Last week fired warning shots across the bow of April's mortgage rate rally. New month, new momentum? No, not just yet. In fact, we haven't seen much of anything so far this month. Last week's initial threat of rising rates quickly gave way to a move back in the other direction, but not a big enough move to suggest any major changes for mortgage lenders. In yesterday's case, rates benefited from weaker economic data in the morning. In today's case, it was a bond-friendly move at the expense stocks this morning. Stocks began losing ground due to earnings data before the bell and continued lower at the 9:30am NYSE open. Bonds don't always follow stocks, but today they did. In other words, bond yields fell in concert with stock prices. Lower bond yields equate to lower mortgage rates, all other

Moment of Truth For Rates and Housing

Fri, 2021-04-30 23:10
This week's 6.4% reading on Q1 GDP reinforced the notion of a strong economic recovery. In turn, the recovery helps to justify the sharp move higher in rates seen during the same 3 months. Rates managed to recover quite a bit in April, but ended up rising slightly this week, by some measures. Is the intermission over? The following charts offer several ways to look at the intermission (basically April's push back against the previous 3 months of significantly higher rates). Mortgage rates have outperformed other parts of the bond market even though they remain highly stratified by loan type and investor. As such, the intermission looks healthy at first glance. The 10yr Treasury yield (the quintessential benchmark of broad longer-term rate momentum) does a better job of showing this week's modest

Mortgage Rates Recover After Some Morning Drama

Thu, 2021-04-29 21:36
Mortgage rates were mixed today, depending on the lender. Virtually every lender began the day with slightly higher rates, but most offered mid-day improvements in response to market conditions. As always, worth remembering that when we talk about "rates" moving higher or lower on almost any given day, the average mortgage borrower will not be seeing an actual change in their " note rate " (the rate at the top of a mortgage/promissory "note"). But note rates only comprise one side of the mortgage rate equation. That's because the cost of borrowing also depends on any upfront costs required by the lender (or credits provided by the lender). Mortgage rates tend to be offered in 0.125% increments and it takes quite a bit of drama in the bond market to imply that big of a rate change in a single

No, The Fed Didn't Do Anything To Mortgage Rates Today

Wed, 2021-04-28 22:10
The Federal Reserve released a new policy announcement today. This is one of the 8 times per year where the Fed can opt to change "rates," or adjust its other policies that impact "rates." Fed announcement days have a track record as being some of the best (or worst) days for mortgage rates. That said, they can be completely meaningless as well, and that's the designation we'd pick for today's version (if we could only pick one). Is it true that the Fed kept rates unchanged at 0-0.25%? Yes , but it's important to understand that refers to the Fed Funds Rate--a target rate for overnight lending between big banks. Mortgage rates can loosely correlate with the Fed Funds Rate over very long time horizons, but they frequently move in the opposite direction. More importantly mortgage rates are constantly

Mortgage Rates Continue Edging Slightly Higher From Recent Lows

Tue, 2021-04-27 22:06
Mortgage rates have fallen almost every single day in April. By the end of last week, that meant the average lender was offering the lowest conventional 30yr fixed rates in more than a month. The first two days of the current week have taken rates in the other direction , albeit at a very modest pace. To get a sense of the size of recent swings, in mid-February, lenders were almost universally able to quote rates under 3%. By mid March, rates were nearly a half point higher. They kicked around a volatile sideways range for a few weeks after that before beginning a steady descent in April--a descent that ultimately brought rates within striking distance of 3%. To be fair, sub-3% rates are currently available--especially for purchases--but they're the exception . The average lender is closer

Disconnect Between Home Sales, Prices, and Rates

Fri, 2021-04-23 23:22
This week's New Home Sales report (for the month of March) stole the show, coming in over 1 million for the first time since 2006. But although sales are up 66% year-over-year, prices have fallen in recent months and are now basically unchanged from last year. What's up with that? Making this all the more puzzling (at first glance, anyway) is the fact that home price appreciation has been breaking records according to some reports. Here's the widely-followed FHFA House Price Index: FHFA's data is for REPEAT sales and refinances. That means it doesn't capture new home prices at the time of construction despite thoroughly tracking home prices in general. There's a separate home sales report for "existing" sales, and it does a better job tracking with FHFA's home price trends. Fortunately, that

Mortgage Rates Improve on 7-Week Lows

Thu, 2021-04-22 22:12
Mortgage rates fell to the lowest levels since March 2nd or 3rd (depending on the lender) yesterday and today they fell just a bit more. Most borrowers will see the exact same rate quotes as yesterday, but a few will have slightly lower upfront costs (or higher lender credits). Even then, the improvement isn't big, but the average day-over-day move rarely is when it comes to rates. The underlying bond market (the primary consideration for lenders in setting daily mortgage rates) was fairly stable today. In the early afternoon, headlines surrounding the proposed increase in capital gains tax rates put downward pressure on stocks and bond yields (lower bond yields = lower rates, all other things being equal). As a result, a few mortgage lenders released improved rate sheets by the end of the

Mortgage Rates Match 7-Week Lows

Wed, 2021-04-21 20:59
Last Thursday was the best day for mortgage rates in more than a month, and while they bounced back up on Thursday afternoon, they've been falling modestly since then. Yesterday got us close to last Thursday's lows. Today helped us match them. That means today's rates are the lowest in exactly 7 weeks. You'd have to go back to March 2nd or 3rd (depends on the lender) to see anything lower. What have the swings been like over this time? Not insignificant, actually! The average conventional 30yr fixed rate rose by 0.25% i n March and has fallen by as much in April. Please note, however, that the things can vary quite a bit depending on the specifics of your scenario and the rate itself. Due to the structure of the bond market that underlies mortgage rates, lender compensation does NOT change

Mortgage Rates Back Near Lowest Levels in Weeks

Tue, 2021-04-20 21:35
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

Best 2 Weeks For Rates in Nearly a Year

Fri, 2021-04-16 22:22
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

Mortgage Rates Falling Quickly to Lowest Levels in Weeks

Thu, 2021-04-15 21:56
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

Mortgage Rates Lowest in Nearly a Month

Tue, 2021-04-13 21:19
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

Victory For Rates; Hope For Housing Inventory?

Sat, 2021-04-10 00:39
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 Lowest in Nearly a Month

Thu, 2021-04-08 21:19
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

Another Tentatively Decent Day For Rates

Wed, 2021-04-07 22:00
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

Mortgage Rate Outlook May Be Improving

Tue, 2021-04-06 22:18
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

Another Decent Day For Mortgage Rates

Thu, 2021-04-01 21:55
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

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