Author: Editor - Finance Top Stories

Mortgage Rates Higher as Lenders Catch Up to Yesterday’s Market Moves

Mortgage rates moved higher for the first time this week, ending a 3-day run at the best levels since mid-October.  Today’s rates are roughly in line with those seen on November 3rd.  Compared to yesterday’s closing levels, bond markets (which dictate mortgage rates) are roughly unchanged today.  That typically corresponds with relatively unchanged mortgage rates.  Today’s departure from the norm is due to bond market weakness yesterday afternoon, which came on too gradually and too late in the day for most lenders to adjust rate sheets accordingly.  Moreover, bond markets were actually in weaker territory this morning when lenders released today’s rate sheets.  That means they had to account for yesterday’s bond market weakness as well as the additional AM weakness today.  The bounce back in bond markets (this afternoon) suggests lenders have some room to offer rate sheet improvements, but so far, only a few have made any changes.  That means many lenders will have some wiggle room tomorrow morning and that rates would likely be slightly lower if bond markets don’t move much overnight. To simplify all of the above, as we discussed yesterday, small red flags in markets translated to slightly higher rates today, and tomorrow can once again be viewed from a more neutral standpoint. Loan Originator Perspective Bond markets endured a challenging day today, as uncertainty on proposed US tax reforms and ECB bond purchasing tapering...

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Mortgage Rates Flat Today, But Some Signs of Pressure

Mortgage rates held steady again today, keeping them in line with the lowest levels in more than 3 weeks.  They’ve also been uncommonly calm so far this week, which certainly isn’t a bad thing when we’re at 3-week lows.  The calm trend began showing cracks at the end of the day in terms of underlying bond markets (movement in bonds ultimately dictates movement in mortgage rates). Bonds began to weaken in the afternoon.  “Weakness” in bonds corresponds to higher rates.  To put the move in context, bonds are still in better territory than they were on any day last week.  In other words, the weakness is quite modest for now.  The risk is that it signifies some sort of shift because of bond trading behavior over the past 2 days.  To oversimplify a complex phenomenon, bonds (the ones we watch to get a bead on mortgage rate movement) hit the same roadblocks for 2 days in a row, and are in the early stages of moving back in a less friendly direction.  It could be a false alarm, but until they’ve reestablished a positive trend (i.e. making progress toward new rate lows), it makes more sense to play it safe in terms of locking vs floating. Loan Originator Perspective Bond markets “sheltered in place” today, staying largely unchanged despite a well-received treasury auction.  MBS are near key resistance points at their...

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Mortgage Rates Steady at 3-Week Lows

Mortgage rates held steadier today after spending 6 of the past 7 days moving lower.  They’re now at their lowest levels in roughly 3 weeks and fairly close to reentering the lower range that ended in September.  That all sounds pretty impressive, but day to day rate movements have been smaller than average for much of 2017.  Some of the most volatile days of the past few months would look more like an average day at most points in 2016.  Offsetting the lack of outright movement by historical standards is the fact that rates have managed to hold at generally low levels.  Most lenders are able to quote conventional 30yr fixed rates just under 4% on top tier scenarios.  Near the end of October, most lenders were creeping up into the low 4% range. Underlying financial markets have been calm so far this week as investors wait for any relevant details regarding the tax reform process.  It’s already looking like bigger news will be on hold until next week at the earliest. Loan Originator Perspective So far this week has been very friendly to floaters.   Bonds continue to add onto yesterday’s modest gains and i am seeing better priced rate sheets.   So far today, over half my floaters have decided to take advantage of the better pricing and lock.  I think that is a wise choice especially if closing within 30...

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Mortgage Rates Drift Calmly Down to 3-Week Lows

Mortgage rates continued lower today, despite a blatant lack of underlying motivation in financial markets.  By that, I mean that we haven’t seen any obvious cause and effect relationships between news, economic data, and bond market movements (which, in turn, drive interest rate movements).  Instead, bonds moved of their own volition.  While the move was modest, it was the 6th improvement in the past 7 business days.  The net effect is the best mortgage rate offerings in 3 weeks. Several of the more aggressive lenders are again quoting top tier 30yr fixed rates of 3.875% while many remain at 4.0%.  In cases where today’s quoted interest rate is the same as Friday’s, borrowers will generally be seeing lower upfront costs (or higher upfront lender credits, depending on the scenario). The rest of the week doesn’t offer too much in terms of scheduled events that promise to stir volatility in financial markets.  That said, volatility could still come from UNscheduled events, especially if they concern any major announcements of progress on the tax reform front (House leaders are actively working on making changes to the tax bill that would increase its odds of making it through the Senate).  In general, successful tax reform is seen as putting upward pressure on rates, all other things being equal, but the extent of that pressure will depend on the details. Today’s Most Prevalent Rates 30YR...

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Mortgage Rates Roughly Unchanged After Jobs Report

Mortgage rates were mostly sideways today although a few lenders offered token improvements.  When we talk about small improvements in “mortgage rates,” we’re often dealing with the “upfront cost” side of the equation that dictates the overall cost of financing.  The other, more obvious side would be the interest rate itself.  Upfront costs offer more of a fine-tuning adjustment.  Many borrowers wouldn’t even notice today’s improvements.  Others will see than as a couple hundred dollars.  Today brought the big jobs report–traditionally one of the most important economic reports as far as interest rates are concerned.  At present, the jobs data is packing less of a punch, simply because strong, stable labor markets are fairly well established in the economic data.  It’s not a surprise for investors, so there’s less of a reaction in stocks and bonds (which drive rates). For now, rates are as low as they’ve been in the past 2 weeks, but there’s not an exceptionally wide margin between the highs and lows during that time.  The average lender continues quoting 4.0% on top tier 30yr fixed scenarios, although more aggressive lenders are slightly lower.   Loan Originator Perspective October’s NFP jobs report was essentially a non-factor today, despite slightly missing expectations.  My pricing today is virtually on par with yesterday’s.  As of mid-day, MBS were slightly higher, but only not enough to trigger lender reprices.  It’ll be interesting to...

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