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Mortgage News Letter


Mortgage News Daily

Are Rates Doomed to Continue Higher?
Fri, 15 Oct 2021 23:47:57 GMT

After a calm summer at historic lows, interest rate volatility has ramped up heading into the fall. What are rates worried about, and is this just the beginning of more drama? In a word: maybe! Because they're based on bonds, rates are always worried about anything that can have a big impact on the supply/demand equation in the bond market. Since March 2020, virtually any major supply/demand consideration can be traced back to the pandemic in some way. In general, the worse the outlook is for covid, the higher the outlook is for rates. Rates have other concerns too. Inflation is a constant consideration for bonds/rates because bonds are repaid on a fixed schedule that cannot adjust for inflation over time. If investors think inflation will move higher, they would demand higher and higher rates ...read more

No, Mortgage Rates Are Not "Sharply Higher" This Week
Thu, 14 Oct 2021 20:47:40 GMT

Mortgage rates fell today as a majority of lenders finally got caught up with the past few days of strength in the bond market. Lenders rely on bonds--specifically mortgage-backed securities (MBS)--to determine where to set mortgage rates. Bonds are constantly on the move, but lenders prefer to just set mortgage rates once per day, if possible. As such, when volatility is higher and when rates have been rising more than falling, lenders tend to be more defensive. In other words, they need to see more sustained improvement than normal before bringing rates back down. Today's improvement was the biggest of the week, and it brings the average conventional 30yr fixed quote well below those seen at the end of last week. Even so, there are numerous news articles out today proclaiming "sharply higher ...read more

Rates Fall For First Time in Over a Week
Wed, 13 Oct 2021 20:03:33 GMT

Closely following intraday moves for the bond market and mortgage rates means that seemingly insignificant time frames are actually important . For instance, it's actually not too common for rates to make it more than 5 business days without falling at least once--even if only slightly. Thankfully, today's modest drop in rates puts an end to just such a streak (rates hadn't improved since last Monday). In a way, this improvement was almost " owed " to prospective mortgage borrowers considering yesterday's counter-intuitive results (higher rates despite bond market gains). For a few moments this morning, it wasn't entirely clear that we would see any improvement. Bonds initially balked at an inflation report released this morning ( spoiler alert: it's still high), but were ultimately able to ...read more

Rates Continue Higher Despite Bond Market Improvement
Tue, 12 Oct 2021 20:16:25 GMT

Mortgage rates continued higher on Tuesday after reaching the highest levels in months by the end of last week. The bond market was closed on Monday, which meant today was the first time most lenders updated their mortgage rate offerings since Friday. Although bonds are most directly responsible for the day-to-day movement in mortgage rates, we don't always see a logical correlation between the two over the short term. For example, bonds are actually in better territory today (something that implies lower rates). So why are rates higher yet again? The main issue is the fact that last week ended with bonds losing ground and that was especially true for mortgage-backed securities (MBS), which most directly affect mortgage rates. While most lenders had already made upward adjustments to rates ...read more

Highest Rates in Months Despite Weak Jobs Report
Fri, 08 Oct 2021 22:37:51 GMT

It goes by many names: The Employment Situation, Nonfarm Payrolls (NFP), or simply "the jobs report." No matter what you call it, the Labor Department's massive collection of employment statistics is one of the most important events for the bond market every month. For a quick reminder as to why mortgage rates care about the bond market, here's a chart of relative movement in the average 30yr fixed mortgage rate and 10yr Treasury Yields (the quintessential bond market benchmark). You may notice that rates have been moving higher recently, and that's where our journey intersects with Friday's jobs report. In short, the government's official job tally of 194k (new jobs created) fell extremely short of the median forecast calling for 500k. At almost any other time in history, this would have sent ...read more