Mortgage Rates

Charges Proceed Increased Regardless of Bond Market Enchancment

charges-proceed-increased-regardless-of-bond-market-enchancment

Mortgage rates continued to rise Tuesday after hitting their highest level in months late last week. The bond market was closed on Monday, which meant most lenders updated their mortgage rate quotes for the first time since Friday.

While bonds are most directly responsible for daily mortgage rate movements, we don’t always see a logical correlation between the two in the short term. For example, bonds are actually in better territory today (which implies lower interest rates).

Why are the interest rates higher again?

The main problem is the fact that bonds have lost ground over the last week, and this was particularly true of mortgage-backed securities (MBS), which are the most direct impact on mortgage rates. While most lenders had adjusted rates up on Friday during the day, bonds continued to lose ground thereafter, and today’s improvement in the bond market was not enough to make up for it. Hence, lenders had to factor in that additional lost ground when they opened their doors in the new week.

What does it all mean for you?

That depends on how sensitive you are to any minor hiccups in the mortgage landscape. Unless you have a loan in progress, the recent movement is too little to convince yourself that the average lender today is not even an eighth of a percentage point higher. In addition, the top-of-the-line conventional 30-year fixed rates are still in the low 3% range. In relative terms, however, these are the highest rates since spring, with the exception of a few fleeting days in June.

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