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Mortgage Rates on Edge Ahead of Fed

by Trevor Sines
Mortgage rates held steady today, on average, despite moderate improvements in underlying bond markets.  Typically, bond market improvement results in comparable improvement for mortgage rates.  The groundholding is the latest evidence of massive anxiety on the part of lenders ahead of tomorrow's big Fed announcement.  Lenders don't want to be on the hook for low rates if the Fed happens to send rates screaming higher tomorrow. To reiterate yesterday's point, we already know the Fed will hike.  Markets are also expecting the Fed to accelerate its forecasts for future rate hikes (this is what pushed rates higher in December, by the way--not […]

Mortgage Rates Approach 3-Year Highs Ahead of Fed

by Trevor Sines
Mortgage rates rose for the 10th time in the past 11 days today, bringing them very close to highest levels in 3 years.  You'd have to go back to April 30th, 2014 to see the average lender offering higher rates.  The most common conventional 30yr fixed quote is easily up to 4.375% on top tier scenarios with a growing number of lenders moving up to 4.5%. Despite that gloomy assessment, there were no new major developments causing bond markets to weaken (weaker bond markets imply lower bond prices and higher rates).  Rather, this has simply been the trend since late February when […]

Mortgage Rates Hold Steady Despite Strong Jobs Data. Here's Why...

by Trevor Sines
Mortgage rates held steady today, despite a key report from the Labor Department showing stronger-than-expected job creation in February.  Typically, a strong jobs report is bad for rates.  This one likely would have been bad as well, but markets got advance notice from another report earlier in the week.   Remember Wednesday's ADP data?  It thoroughly trounced the 190k expectation, coming in at 298k.  Given that the ADP data attempts to track/predict the Labor Department's report, rates were able to rise preemptively before this morning's data ever came out.   ...(read more) Forward this article via email:  Send a copy of this story […]

Mortgage Rates Keep Pushing 2017 Highs

by Trevor Sines
Mortgage rates rose again today, bringing them further into the highest levels of the year.  If there's anything redeeming about the move it's that it wasn't nearly as abrupt as yesterday.  In fact, several lenders were fairly close to yesterday's offerings.  The average lender is back up to 4.375% on top tier conventional 30yr fixed quotes.  A few remain at 4.25% and some are already up to 4.5%. Bond markets (which underlie rate movement) are feeling pretty pessimistic right now, primarily due to the recent and rapid increase in Fed rate hike expectations. ...(read more) Forward this article via email:  Send a copy […]

Mortgage Rates Spike to 2017 Highs

by Trevor Sines
Mortgage rates spiked, big-time, today.  Underlying bond markets had already moved higher in rate overnight, but the trend was taken to a new level by an exceptionally strong employment report from ADP.  Although this isn't the big jobs report (we'll get that on Friday), many market participants treat the ADP numbers as one of several advance indicators of Friday's jobs report.  Sometimes it doesn't register a response, but when it beats the forecast by as much as it did today (298k vs 190k), markets can't help but adjust their trajectory ahead of Friday. The net effect was the sharpest move higher in […]

Mortgage Rates Remain Near Recent Highs

by Trevor Sines
Mortgage rates rose moderately today, keeping them in line with recent highs.  The run to those highs took place largely over the past week as markets quickly adjusted their expectations for a Fed rate hike at next Wednesday's meeting.  As of last Thursday, market-implied probability was about as high as it ever gets.  Similarly, rates haven't moved much from last Thursday.  They were down just slightly on Friday and up by about the same amount today.   Combine the past few days of limited movement with the bigger-picture post-election range, and there's a sense that we're waiting for a verdict about where […]

Mortgage Rate Losing Streak Pauses

by Trevor Sines
After moving higher for 5 days in a row, mortgage rates finally moved a bit lower today.  The improvement was fairly small, however, merely undoing Friday's modest move higher.   Bonds markets (which dictate rates) continue to price in extremely high chances of a Fed rate hike next week.  That wasn't entirely the case before the recent 5-day losing streak.  In fact, the odds of a Fed rate hike more than doubled last week based on market metrics.   This doesn't mean the Fed was half as likely to hike 2 weeks ago.  Rather, it has more to do with the fact […]

Mortgage Rates Rise For 5th Straight Day

by Trevor Sines
Mortgage rates rose by the smallest amount of the week today, but they rose nonetheless.  That caps a streak of 5 straight days spent moving in an unfriendly direction.  The caveat is that we continue to deal with an overall range that is generally very narrow.  Between last week's lows and this week's highs, there's scarcely more than .125% in rate.  And the biggest single-day movement (Wednesday) only saw an effective rate increase of 0.07%.  Each of the remaining days was 0.03% or less. That big move on Wednesday was due to comments from NY Fed President Dudley on the likelihood of […]

Rates and Potential Volatility Are Much Higher Than Last Week

by Trevor Sines
Mortgage rates were only modestly higher today, extending the recent losing streak to its 4th straight day.  This keeps the average conventional 30yr fixed at 4.25% for top tier scenarios.  Before that, it averaged 4.125% for most of February.  Bond markets (which dictate interest rates) are taking their cues primarily from Fed rate hike expectations.   More so than the Fed Funds Rate itself, mortgage rates tend to track fairly closely with Fed rate EXPECTATIONS.  The last 2 times the Fed has hiked, this resulted in mortgage rates moving lower AFTER the Fed rate moved higher.  It's fun to point out the apparent paradox, but […]

Mortgage Rates Rise After Trump Speech, But Not Necessarily Because of It

by Trevor Sines
Mortgage rates moved sharply higher today, bringing the average top tier 30yr fixed quote back to 4.25% from 4.125% previously.  That doesn't exactly mean that rates are .125%, depending on your perspective.  While the actual rate applied to loan balances is .125% higher on average, the amount of interest paid in conjunction with a mortgage is also depends on upfront costs.  In cases where borrowers are being quoted .125% higher in rate today, those upfront costs are generally lower.  If we express those costs in terms of rate, the actual day-over-day change is 0.07%.  That may not seem like much, but it's the […]