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 edged up to 4-year highs with yesterday's bond market losses and things went from bad to worse today. Bond markets (which underlie and directly affect rates) are under extreme pressure today and have generally had a very bad September. Weakness in bonds equates to higher rates. So why are bonds weak? In part, this is weakness that was expected way back at the beginning of the year as the tax bill came to fruition and as economic data continued to suggest ongoing expansion. Given that the inflation/growth outlook was a whole lot worse in 2013 and early 2014 when 10yr Treasury yields briefly crested 3.0%, it stood to reason that those same yields would almost certainly need to move well over 3.0% this time around (inflation/growth are key factors in Treasury yields and rates in
Mortgage rates may have had a fairly bad day last Friday, but today was worse . Today officially saw the average lender back at rates not seen since May 17th, 2018. That date might not seem too far away, but at the time, it marked the highest rates since late April of 2011. In other words, today's rates matched 7-year highs. If there's a saving grace , it's the fact that underlying bond markets were able to improve throughout the day without most mortgage lenders adjusting rate sheets accordingly. In other words, if bonds are in the same territory by tomorrow morning, the average lender would be offering slightly lower rates. The other potential saving grace is that rates have had a bad enough moving streak that they're increasingly likely to catch a break simply due to the normal cadence of
Mortgage rates had a bad day. Even after a weaker reading on Retail Sales (something that normally helps), the bond market lost ground. Unfortunately, that's consistent with the rest of the week as investors have largely shunned bonds. Lower demand for bonds = higher rates. Perhaps "shunned" isn't the perfect word. Investors are indeed buying bonds, but there have been so many to buy this week that sellers have had to lower prices to get them out the door. That's a bit of an oversimplification of the how things actually work, but the dynamic of higher supply driving higher rates is at the heart of the issue. Beyond that, investors are nervous about buying bonds too aggressively in an environment where wages are rising, retail sales are holding steady at long-term highs, consumer sentiment is
Real Estate Broker
CNMS, CRNS, CRS, GRI