Mortgage News Daily provides the most extensive and accurate coverage of the mortgage interest rate markets. Get daily updates on the primary mortgage market and how it is affecting interest rates. Stay connected and INFORMED!
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!
Mortgage rates closed out their worst week since 2016 on Friday as the bond market underwent a classic correction after its best month since 2011. The bigger and more sustained a drop in rates, the bigger the potential correction. There were, however, some actual market fundamentals underpinning the rate spike. Some investors are worried that central banks (like the Fed) are starting to think about the current rate cut cycle as shallow and temporary. While that would bode well for the economy, it's not a pleasant thought for longer-term rates (which have already priced in at least 2 more Fed rate cuts in the next few months). In other words, mortgage rates won't care in the slightest when and if the Fed cuts rates this Wednesday. The Fed's outlook on future rate cuts and on its policy stance
Mortgage rates didn't have a great day today, moving even higher from what were already the worst levels in a month as of yesterday afternoon. In and of itself, this single day wasn't any more dramatic than the average "bad day," but taken together with the past 3 days and the assessment is more grim. Simply put, this is now the worst week for mortgage rates since the 2016 presidential election. If that seems way too depressing, don't worry, I have a counterpoint for you! Each of the 3 weeks before that saw at least one day of mortgage rates at their lowest levels in 3 years. These also happened to be 3 of the most stable weeks that rates have ever enjoyed when holding so close to long-term lows. The typical pattern is for a quick run down followed by a similarly quick jump back up. For instance
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