Posted To: Mortgage Rate Watch
Mortgage rates hit their highest levels in months yesterday as bonds lost ground at a brisk pace to start the new week. Bonds–specifically mortgage-backed securities (MBS)–are the most important ingredient used by lenders to determine mortgage rates. Bond market weakness (i.e. “losing ground”) means that bond PRICES are falling. Bond prices vary inversely with bond yields, and yield is just a fancy term for “rate.” In simpler terms, bond sellers had to offer higher rates of return to attract reluctant buyers. But why are bonds struggling? This is actually a general trend for bonds and rates for just over a year as the economy battles back against covid. The middle of 2021 was a bit of an aberration as the delta variant brought new pandemic-related uncertainty to financial markets. But now…(read more)
