Rates continue to rise despite improving bond market


Mortgage rates continued to rise on Tuesday after hitting their highest levels in months late last week. The bond market was closed on Monday, meaning that today was the first time most lenders have updated their mortgage rate offers since Friday.

Although bonds are most directly responsible for the daily movement of mortgage rates, we not always see a logical correlation between the two in the short term. For example, bonds are actually in better territory today (implying lower rates).

So why are the rates even higher?

The main problem is the fact that last week ended with a loss of ground for bonds and this was especially true for mortgage backed securities (MBS), which most directly affect mortgage rates. While most lenders had already made upward rate adjustments during the day of Friday, bonds continued to lose ground thereafter and today’s bond market improved. was not enough to compensate. As such, lenders had to factor in this additional lost ground when they opened the new week.

What does all of this mean to you?

It depends on your sensitivity to every little problem in the mortgage rate landscape. Unless you have a loan outstanding right now, the recent movement is too weak to obsess over the average lender, not even an eighth of a percentage point higher today. In addition, the top 30-year conventional fixed rates are still in the low range of 3%. In relative terms, however, these are the highest rates since spring except for a few fleeting days in June.


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