Mortgage Charges Drift Up From Latest Lows
Mortgage rates were unchanged or slightly higher today, depending on the lender. The differences in the pricing strategies result from the timing of the changes in the bond market.
Mortgage lenders set their interest rates based on the prices of Mortgage Backed Securities (MBS), which change constantly throughout the day. Despite these changes, there is often enough stability for lenders to “hire and forget” them. On days when MBS are moving more than normal, lenders can change their mortgage rate quotes in the middle of the day.
In today’s case, these changes just got too big to be overlooked at the end of the trading day. As a result, only a handful of lenders decided to make changes, and even then those changes were relatively minor.
The implication is that rates should be a little higher tomorrow morning (for lenders who made no changes today) with all other things the same. Additionally, all lenders will face increased volatility in the coming days due to the release of several key economic reports that culminated in Friday’s Big Jobs report.