Mortgage Rate News

Tuesday December 13th is the day many people have been waiting for ever since Thursday November 10th. What do those two days have in common? They each mark the monthly release of the Consumer Price Index, the official inflation data responsible for some of 2022’s wildest trading days. Wild trading days aren’t just for traders.  They have a big impact on mortgage rates, not to mention bigger picture impacts.  For instance, if a wild trading day were to ensue from a higher reading on inflation, it would imply more restrictive policies from the Federal Reserve.  That’s something that can shape entire economic cycles, potentially hastening the recession that some market-watchers expect in 2023. In the case of December 13th, it makes a lot of sense to worry about the implications for Fed policy.  The Fed releases its next statement the very next day!  It’s a near certainty that the Fed will hike rates by 0.50%, a 0.25% decrease from the last hike in early November.  Markets won’t be reacting to that as much as the info the Fed publishes alongside the rate hike. Of specific concern is the proverbial “dot plot.”  This is a reference to the format of the Fed’s forward-looking rate forecasts, published in dot plot format showing each Fed member’s thoughts.  The “dots,” as they’re also called, frequently have the biggest impact on financial markets on the days when they come out (only 4 of the 8 Fed meetings per year). 

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-12102022

Mortgage rates have been remarkably well behaved since the November 10th release of the last Consumer Price Index (CPI), the monthly inflation report that has the biggest impact on the market.  The next CPI comes out next Tuesday.  Much of the time spent between these two reports could be described as an inconsequential waiting game. Today’s rates happened to be a bit higher than yesterday’s, but we’re talking about levels of movement that are only going to matter to borrowers who are actively looking to lock a rate this week.  Even then, the changes won’t be big enough for many borrowers to care. All of that changes next week, or at least it has the most potential to change next week.  The CPI report comes out on Tuesday.  If that’s not enough to cause an extreme reaction in the bond market, the Fed announcement is out the next day and it can also pack a punch. Between now and then, while there are never any guarantees about the future when it comes to financial markets, rates aren’t likely to be anywhere other than the mid-to-low 6% range for top tier conventional 30yr fixed scenarios.

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-12082022

Mortgage rates moved moderately lower today after new economic data showed a big drop in the cost of labor in Q3.  Labor costs are one of the places the Fed looks for evidence that inflation is becoming entrenched.  In today’s case, the drop suggests additional moderation in the pace of underlying inflationary pressures. The market’s reaction was possibly bigger than it otherwise might have been due to the intense focus on next week’s inflation data on Tuesday and the likely announcement of a smaller rate hike from the Fed the following day.   In short, rampant inflation has been the biggest contributor to the abrupt rate spike in 2022 and the hope is increasing that a shift is about to be confirmed.  Today’s mortgage rates aren’t significantly lower than yesterday’s on average, but it was enough of a movement for the average lender to hit the the lowest levels since early September.  

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-12072022

This week continues to be a placeholder ahead of more consequential events coming up in the week ahead.  Specifically, next Tuesday and Wednesday’s combination of the Consumer Price Index and the Fed announcement will unequivocally set the tone for rates heading into the end of the year and possibly beyond. Between now and then, there’s not much to be done when it comes to big changes in rates.  Today was another great example as the bonds that underlie the mortgage market traded well inside the range that’s been intact since last Wednesday afternoon.  In fact, today’s trading only occupied a small portion of that range. When markets trade in increasingly narrow ranges, it’s a sign of indecision and anticipation ahead of bigger-ticket events, or at least it can be.  In the current case, it’s highly likely.   Drilling down to nitty gritty detail, we find the average rate was just a bit higher this morning compared to yesterday afternoon, but that can vary by lender depending on the timing and size of yesterday’s rate increases.  In the bigger picture, the average lender is still in the mid 6% range (or just below) for a top tier conventional conforming 30yr fixed scenario.

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-12062022

The mortgage landscape is very interesting at the moment.  On any given day, some lenders are moving higher, others are moving lower, and the rest are remaining relatively unchanged.  The average lender has been closer to unchanged so far this week but that’s a good thing considering rates are in line with their lowest levels in nearly 2 months.  Earlier this morning, it looked like there could have been some risk to the low rate outlook as the Retail Sales report came out stronger than expected for the month of October.  The bond market briefly lost ground–something that coincides with rates moving higher–but quickly recovered and moved to stronger levels (something that coincides with rates moving lower). All of this volatility played out before mortgage lenders published their first rate sheets of the day.  Modest additional gains in the bond market allowed many lenders to lower rates slightly in the afternoon. In general, lenders have been cautious about adjusting rates as quickly as market movement would allow.  This has enabled them to hold steadier on days where the market should be pushing rates higher, but also makes for less responsiveness on days where bonds should be pushing rates lower. 

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-11162022

Let’s talk about the current state of mortgage rates.  Before we do, some housekeeping: the following pertains to averages across multiple lenders.  This is an important caveat over the past few days because lenders have adjusted their individual rates by widely varying amounts and in different directions from one another on several occasions.  By the time we add all of the apples into the same batch of apple juice, it tastes remarkably similar to last Thursday afternoon–perhaps slightly sweeter.  In other words, the average lender is roughly in line with (or just barely below) the multi-week lows from Thursday.  You’d have to go back just under 2 months to see anything lower. The average conventional 30yr fixed rate is easily back into the mid 6% range.  Today’s improvements followed more rate-friendly inflation data (it was last week’s consumer inflation data that caused Thursday’s epic drop), in this case, producer-level inflation data via the PPI report.

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-11152022

If you’re just getting caught up, last Thursday was one for the record books–at least when it comes to the daily records that exist going back to 2009.  No other day has seen as big of a drop in the average 30yr fixed mortgage rate (0.60%). The bonds that dictate mortgage rates lost quite a bit of ground today, but that didn’t translate to any meaningful damage.  This speaks to the ‘uncertainty premium’ that oftentimes prevents lenders from dropping rates as much as the market might suggest at the end of any given week.  It’s usually more noticeable before 3-day weekends, but was easily lost in the shuffle given the scope of the movement. In simpler terms, lenders had to hold something back on Thursday, even though it didn’t look like it at the time.  That may have translated to even lower rates today, had the bond market made gains.  Instead, it allowed lenders to keep rates relatively unchanged even though bonds suggested a move higher. The bigger picture is more promising than it had been, but still dependent on additional data for confirmation.  The worse the economy is doing, the better rates should be able to do, as long as inflation continues to moderate.  

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-11142022

If you’re just getting caught up, last Thursday was one for the record books–at least when it comes to the daily records that exist going back to 2009.  No other day has seen as big of a drop in the average 30yr fixed mortgage rate (0.60%). The bonds that dictate mortgage rates lost quite a bit of ground today, but that didn’t translate to any meaningful damage.  This speaks to the ‘uncertainty premium’ that oftentimes prevents lenders from dropping rates as much as the market might suggest at the end of any given week.  It’s usually more noticeable before 3-day weekends, but was easily lost in the shuffle given the scope of the movement. In simpler terms, lenders had to hold something back on Thursday, even though it didn’t look like it at the time.  That may have translated to even lower rates today, had the bond market made gains.  Instead, it allowed lenders to keep rates relatively unchanged even though bonds suggested a move higher. The bigger picture is more promising than it had been, but still dependent on additional data for confirmation.  The worse the economy is doing, the better rates should be able to do, as long as inflation continues to moderate.  

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-11142022

Heading into this week, we knew that Thursday’s Consumer Price Index (CPI) would be critically important. It did not disappoint. CPI is one of two key inflation reports in the US.  PCE (Personal Consumption Expenditures) is the other big index, but because CPI comes out 2 weeks earlier, it gets almost all of the market’s response.   The response to Thursday’s CPI was record setting in at least one important way, and still astonishing in many others.  Let’s talk about why. Why was this week’s CPI so important? First off, almost every CPI report has been important in 2022.  No other economic report has caused more volatility for the bond market.  Because bonds dictate interest rates, we can also say CPI has caused just as much volatility in the mortgage world.  CPI is the king of economic data in 2022 because inflation is the dominant focus of the financial market and the Federal Reserve (aka “the Fed”).  The Fed sets policies intended to keep inflation at a low, stable level.  Runaway inflation causes the Fed to hike interest rates in order to slow down the demand side of the economy.  In the post-pandemic environment where a good amount of inflation is thought to be driven by the SUPPLY side of the economy, that’s resulted in the Fed being particularly aggressive in trying to tamp down demand.

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-11102022

Mortgage rates experienced one of their calmest days of the past few weeks with the average lender roughly unchanged from yesterday.  Rates are based on bonds, and the underlying bond market has increasingly been hunkering down before a big potential day on Thursday. Why big?  It’s all about CPI. The newest installment of the Consumer Price Index (CPI) will be released at 8:30am on Thursday morning.  This scheduled economic data has had more power than any other economic report to cause volatility in the bond market in 2022.  If inflation remains high or moves higher, rates will likely surge back up to (or above) the 20-year highs seen at the end of October.  If inflation decelerates, rates are likely to move in the other direction. Nothing else on tap for this week has been in the same league as CPI when it comes to rate movement potential.  That is part of the reason the rate market has been less volatile on the first three days of the week: it knows it will likely be making a much bigger move and is just waiting to find out which direction.

Read more here: https://www.mortgagenewsdaily.com/markets/mortgage-rates-11092022