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Mortgage Rates Move Higher, Ending 2-Day Winning Streak

Mortgage rates couldn't maintain last week's impressive move lower following the Fed Announcement.  At the time, rates were moving lower for ECONOMIC reasons.  At the risk of oversimplifying, the Fed essentially conveyed a gloomy longer term outlook on the economy and this tends to put downward pressure on rates.  

The economic outlook is only one of the factors that affect rates.  Supply and demand in the bond market is also a consideration.  Higher supply causes sellers to lower prices to compete.  When prices fall, rates rise.  This was the case today as bond markets coped with an unexpectedly large glut of supply.  Mortgage rates were less affected than other sectors because the bonds that underlie mortgages weren't the subject of the increased supply.  That said, they are interconnected with other parts of the bond market, and thus share some of the pain.

Most lenders adjusted rate sheets higher before the end of the day.  Even then, today's rates are still much better than those seen on the morning before last week's Fed Announcement.  In other words, if you didn't lock on Friday, today's losses are small enough that you'll still be benefiting from much of the post-Fed move.

This Daily Mortgage Rate Update is provided in partnership with Mortgage News Daily.