Mortgage Rates Improve Again, Making it Back to Last Week’s Levels
Mortgage rates moved lower again today, with many lenders making it back to the levels seen after last Friday’s jobs report. In week-over-week terms, rates were still decidedly higher at the beginning of the day. It wasn’t until the afternoon’s 30yr bond auction that the entire bond market improved enough for mortgage lenders to offer mid-day reprices. A similar pattern played out yesterday.
Why do Treasury auctions matter to mortgage rates? Treasuries and MBS (mortgage-backed securities–the bonds that most directly affect mortgage rates) are both part of the bond market. They correlate quite well for a variety of reasons (not the least of which being that Treasuries are the risk-free starting point against which every dollar-denominated bond investment is measured). As such, when Treasuries have a good day, MBS (and thus, mortgage rates) tend to have at least a decent day. Today (like yesterday) was no exception.…(read more)
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