Mortgage rates were slightly higher today, but remained much closer to the best levels of the week seen yesterday. In general, this week has served as a correction to last Friday’s excessive losses. In that regard, it has been almost totally successful considering today’s rates are right in line with last Thursday’s. Most lenders continue to quote a conventional 30yr fixed rate of 3.875% for top tier scenarios. The more aggressive lenders remain at 3.75% and a small minority is still at 4.0%. Most borrowers will see today’s weakness in the form of slightly higher up front costs for the same rate as yesterday.
There was not much going on today in the financial markets that underlie mortgage rate movements. The economic data in the morning served as a temporary speed bump for a moderately weak trend that had been intact since yesterday morning (“weakness” equates to upward pressure on rates in this context). But once again, our perceptions of weakness and strength are largely arising due to short term ‘corrections.’ In the current case, yesterday’s Retail Sales data started the morning off with plenty of strength for bond markets. The weaker trend mentioned above was simply a correction to that strength. It ran its course by this morning and left bond markets to drift sideways into the weekend.
Next week brings the FOMC Announcement, which can have a significant impact on rates. It could be good or bad for us, but either way, the potential movement is huge.