Category: Current Mortgage Rates

This week’s mortgage rates are hard to compare to last week’s.  There are two simple reasons for this.  The first is the recent removal of the adverse market fee that artificially increased rates for refinance transactions starting late last summer.  The second is the general strength in the bond market compared to last week.  Mortgage rates are, after all, based on trading levels in the bond market with higher prices (or lower yields) coinciding with lower rates.  Bonds aren’t doing quite as well as they were doing on Monday, but because lenders didn’t rush to drop rates as much as the bond market allowed earlier in the week, they haven’t had to dial things back as much as bonds would suggest over the past 2 days.

Now today, bonds are improving once again, albeit only slightly.  Still, the fact that improvement is even on the menu when bonds are operating in their best range since February is impressive.  The average mortgage lender isn’t offering quite the same rates seen on Tuesday morning, but they’re close.  Moreover, apart from the past few days, we’d have to go back to February to see anything nearly as low.

There are two pieces of big news for mortgage rates over the past few business days.  The first arrived last week in the form of the removal of the adverse market fee that artificially increased rates for refinance transactions starting late last summer.  The second arrived yesterday in the form of an impressive improvement in the bond market (bonds are the primary source of motivation for mortgage rates).  This friendly double whammy pushed the average lender easily into the lowest rate range since early February with conventional refinance quotes once again coming in under 3.0% in best-case scenarios.

It remains to be seen how long we’ll be able to enjoy these rates.  Today’s bond market volatility offered a warning.  The first few hours of trading were actually stellar, with bonds improving to significantly better levels than yesterday.  This was actually partly responsible for this morning’s rates being even lower than yesterday’s.  Then, in less than 2 hours, all of those gains were gone, and mortgage lenders were issuing negative reprices early this afternoon.  Granted, rates are still stellar, even after those mid-day price changes, but the intraday volatility is a reminder that rates can move in two directions.