Mortgage Rate Watch
Near Record Setting Week For Boredom Among Mortgage Rate Watchers Thu, 28 Mar 2024 19:01:00 GMT

Unfortunately, we don't have a great way to measure all of the past precedents, but it's safe to say that the this was one of the least volatile weeks in the history of mortgage rates.  Our daily rate index never moved more than 0.01 and it remained in a 0.01 range. Today's average rate was right in line with yesterday's even though the bond market (the thing that normally dictates rates) suggested some movement.  Despite the suggestion, it's not a huge surprise to see another flat day given the early close in financial markets and the full closure tomorrow.  Lenders often adopt less nimble pricing strategies on these holiday weeks--only making noticeable moves when the market really forces their hands. Next week continues to be a different story--at least in terms of what's possible.  In other words, this week was never likely to offer much excitement.  Next week has infinitely more potential to do so depending on the outcome of the economic reports--especially Friday's jobs report. 
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Super Steady Streak Sustained Wed, 27 Mar 2024 19:44:00 GMT

There are probably only a few 4-day streaks with effectively no movement in mortgage rates, and this is one of them.  After falling to 6.91% last Friday, the MND rate index hasn't moved more than 0.01%. Granted, some lenders have been higher or lower during that time, but they offset each other in such a way that the average stayed flat. There's no special significance to this development.  It's more of a trivia novelty.  If we were determined to assign meaning, we could say that the flat performance is evidence that the rate market is fraught with uncertainty as it waits to see how the next round of significant economic data will shape the next trend.  Markets don't have to wait much longer as the more relevant reports start rolling in next Monday.  As for this week, there are several middle tier reports on Thursday morning, and then markets are closed on Friday.
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Mortgage Rates Barely Budge For 2nd Straight Day Tue, 26 Mar 2024 19:44:00 GMT

After moving back under 7% last week (conventional, 30yr fixed, top tier scenario), mortgage rates have been increasingly unlikely to move.  Today was the 2nd day in a row with essentially no change for the average lender. Rates are driven by bonds and bonds are waiting on the most relevant economic data to offer a comment on the path of inflation and the economy in general.  If inflation falls a bit more or if the economy shows marked signs of weakening, it would tip the scales in favor of lower rates. Most of the data in question will be released next week.  This week is sparse by comparison.  Today's data was mixed and it wasn't highly consequential in the first place.  Tomorrow is essentially data-free.  Thursday brings several reports, but again, nothing substantial.  With Friday being a holiday, the takeaway is that volatility is a much more relevant risk next week.  
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Mortgage Rates Basically Unchanged Over The Weekend Mon, 25 Mar 2024 20:07:00 GMT

Mortgage rates enjoyed a decently strong week last week, with the average top tier conventional 30yr fixed rate moving down to 6.91% by Friday from 7.09% on the previous Friday.  To put today's "unchanged" headline in perspective, that same number is up to 6.92% this afternoon. To put all of the above in an even broader perspective, the recent, major extremes consist of October 2023's highs at just over 8% and late December lows just over 6.6%.  In other words, we've moved a bit higher in 2024, but are still holding on to a majority of the improvement from long-term peak. There were no obvious motivations for rate movement today and that could be an ongoing theme this week based on the scarcity of big ticket market moving events.  That's especially notable compared to next week's calendar which boasts a major event on 4 out of 5 days with Friday bringing one of the two most important economic reports of any given month: the jobs report.
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Mortgage Rates Now Lowest in Nearly 2 Weeks Fri, 22 Mar 2024 21:15:00 GMT

As the broader market continued rubbing its eyes in disbelief over the Fed's exceptionally calm attitude on inflation, bonds continued to improve today.  Stronger bonds mean lower rates.  The average mortgage lender was able to drop rates to the lowest levels in nearly 2 weeks--just a hair above March 11th levels. Most of the bond market improvement was in place before 9am and things were very calm after that.  This meant minimal mid-day price changes.   Next week has less by way of consequential calendar events compared to this week and it's also made shorter by the Good Friday Holiday closure.  After that, volatility risks will be increasing quickly as the first week of April brings several highly consequential reports. 
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Mortgage Rates Are Actually LOWER This Week Thu, 21 Mar 2024 20:33:00 GMT

It's Thursday and thus time once again to check in with Freddie Mac's weekly mortgage rate survey versus reality.  To be fair, it's not that Freddie isn't participating in reality.  It's just not the same version of reality you might prefer if you are in need of more timely updates on rate trends. Freddie logged a big increase over last week, which makes sense considering last week's survey was much lower than it should have been due to Freddie's methodology and timing (we discussed it here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-03152024). This time around, Freddie's survey is averaging the 5 days from last Thursday through yesterday.  Today's rate is lower than all of those with the average lender back into the high 6's.   NOTE: Freddie also has their rate in the high 6's, but it tends to run much lower than the MND rate because it doesn't include any impact for points or special loan programs.  This is one of the many reasons we say the best way to follow a rate index is to observe the CHANGE over time as opposed to outright levels. 
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Fed "Held Rates Steady," But Mortgage Rates Improved Wed, 20 Mar 2024 20:25:00 GMT

The rate market was intently focused on today's announcement from the Federal Reserve.  While many news headlines emphasize the Fed "holding rates steady," but that's not what the bond market was focused on.  Because mortgage rates are determined by the bond market, that meant they were free to move even though the Fed stood still. Markets were most interested in the Fed's projections for future rate cuts.  In not so many words, those projections retained the Fed's previous expectation of 3 rate cuts by the end of this year, albeit by a smaller margin than the last round of projections in December. This was a bit more hopeful than markets expected. As such, bonds improved and mortgage rates fell.   The catch is that the improvement wasn't very big, so the average mortgage lender is still in noticeably higher territory compared to the beginning of last week.
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What Will The Fed Do To Mortgage Rates on Wednesday? Tue, 19 Mar 2024 20:11:00 GMT

Mortgage rates were roughly unchanged on Tuesday, capping a short but meaningful losing streak over the past 6 business days. During that time, the average 30yr fixed rate move back into the low 7s and came close enough to the 2024 ceiling from 3 weeks ago. Impending events are set to either reinforce the ceiling or see it broken.  The events in question are the 3 components of Wednesday's "Fed day."  It used to be that a Fed announcement was simply a document that specified whether the Fed was hiking/cutting rates, along with some prose talking about the outlook for rates and the economy.  That policy statement is still part of the show, but it's joined by a press conference with the Fed Chair on each of the 8 announcement per year. The even bigger source of volatility is the Fed's summary of economic projections (SEP) which is only released on 4 out of the 8 Fed days each year.  Wednesday's announcement is one of the 4.   The SEP matters because it contains an outlook for the Fed Funds Rate for each individual member.  The Fed Funds Rate itself does not directly dictate mortgage rates, but CHANGES in rate cut/hike expectations tend to give mortgage rates a decisive push in one direction or the other. The market is already expecting a bit of an unfriendly change this time around, but the reality could easily differ from expectations.  To whatever extent it does, mortgage rates are likely to make bigger moves tomorrow, for better or worse.
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Mortgage Rates Inch to March Highs Mon, 18 Mar 2024 19:50:00 GMT

Rates marched higher to the highest levels in March today, but most lenders are only microscopically worse off than Friday afternoon.  In the slightly bigger picture rates have moved up roughly a quarter of a percent in just over a week and that's a relatively quick move. The last time rates rose a quarter of a point in short order was at the beginning of February.  The entire jump happened in a single day following the release of much stronger jobs data.  It was also followed by additional momentum thanks to inflation data in the following week. The current move is also data driven with two inflation reports coming in hotter than expected last week.  The average lender is now very close to their highest levels in several months, which seems fitting considering the arrival of the next Fed announcement on Wednesday. We already know the Fed will not be cutting rates.  We don't know how they'll adjust their rate outlook for the rest of the year.  The last update (on December 13th) was very friendly.  This update should be less so.  If the Fed's shift in "friendliness" matches market expectations, we may not get too much volatility, but considering the circumstances, volatility is a distinct risk.  
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On The Road To Rate Cuts, Markets Asking "Are We There Yet?" (Spoiler Alert: No) Fri, 15 Mar 2024 20:49:00 GMT

Back in late 2023, we got in the car with the Federal Reserve with the promise of a trip to our favorite place: the land of lower interest rates. In 2024, we keep asking "are we there yet?" The more we ask, the farther we seem to be from the destination. This trip began with all the best intentions. Softer inflation and cooler economic data led the Fed to expect an opportunity to cut rates several times in 2024.  The Fed communicated as much in mid-December.  Markets took things a step further with futures contracts pricing in 6 cuts by the end of the year.  "6 rate cuts" was a refrain that echoed throughout the mortgage and housing industries.  Suddenly, too many people were risking disappointment by not understanding the HIGHLY conditional logic behind the 6 cut mantra. It wasn't necessarily a mistake for the market to get so far ahead of the Fed's official outlook.  After all, the Fed has a history of cutting rates MUCH faster than its projections suggest.  But the decision would ultimately be dependent on continued progress on inflation, and more economic cooling. With the release of this week's inflation data, we now have two consecutive months that raise serious objections to the notion that the Fed will be able to cut any time soon.   This is a chart of the core Consumer Price Index (CPI) in year over year terms.  This is the inflation metric that the Fed wants to see at 2% and they've been clear in saying they can cut rates if they're confident that we'll get there.  It shows clear, substantial progress toward that goal:
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