Mortgage rates moved slightly higher today, but only after moving slightly lower earlier this morning.   “Higher” and “lower” are more informative if we’re dealing with a well-defined starting point, so let’s deal!  From a starting point of last Friday afternoon, the average mortgage lender moved very slightly lower with the initial rates published on Monday morning.  In the broader context, those rates are still quite high with only a handful of days over the past 3 months being any worse.  Prior to June, you’d have to go back to 2008 to see higher rates. All that to say the modest improvement seen this morning was “nice,” but not exactly cause for celebration.  Even then, the improvement didn’t last long.  The underlying bond market (which dictates rates) began losing ground after a scheduled auction of 10yr Treasury Notes. 10yr Treasuries don’t directly determine mortgage rates, but quick moves in the 10yr tend to impact the bonds that specifically determine mortgage rates.  The correlation can be stronger or weaker depending on the day.  Today was actually a bit better for mortgage-backed bonds, but that’s really only an anecdote that sets up a warning. 10yr Treasuries had it worse than mortgage bonds today because the average mortgage isn’t expected to last 10 years right now.  In other words, if mortgage bonds had to pick a Treasury security to emulate in terms of life-span, a 5yr or 7yr note would be a much better choice (some might even say the 3yr, but that depends on things happening in a fairly specific way over the next 2 years).

Published On: September 12, 2022 / Categories: Mortgage News /