Mortgage rates stabilize for now


Mortgage rates hit their highest levels in months yesterday as bonds lost ground at a steady pace to start the new week. Bonds – especially mortgage backed securities (MBS) – are the most important ingredient used by lenders to determine mortgage rates. Weak bond market (ie “losing ground”) means bond PRICES are falling. Bond prices vary inversely with bond yields, and yield is just a fancy term for “rate.”

Put simply, bond sellers had to offer higher rates of return to attract reluctant buyers.

Corn why are bonds in trouble? This is actually a general trend for bonds and rates for just over a year as the economy battles covid. The middle of 2021 was a bit of an aberration as the delta variant brought new pandemic-related uncertainty to financial markets. But now that the number of cases is steadily dropping again, rates are reverting to doing what they typically always did when covid seemed to be on the run.

Does all of this mean that rates could publication date if the covid situation deteriorates this winter? Yes, but we don’t know by how much. There are other factors to consider in both cases. For now, all we know is that the trend is NOT our friend even though we sometimes have days like today when rates manage to regain some lost ground. Think of it as the proverbial 1 step forward after 2 steps back.


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