Mortgage Rates

Mortgage Charges Lastly Catch a Break


After spending the last four business days climbing to the top quickly, Mortgage rates finally take a break today, but she was small. In fact, the average prospective borrower would likely not see any change in their actual mortgage rate. Rather, the improvement – if at all – would make itself felt in the form of slightly lower up-front costs or a slightly higher loan from the lender, depending on the scenario.

As we discussed yesterday, this type of recovery has become increasingly likely due to typical patterns in the bond market (mortgage rates are based on bonds). But that does not have much weight in the overall picture. This is more of a symbolic improvement – a coincidental need. Bond traders have focused on screaming at the sky and today they needed a respite.

Could this simply be the first look at a major reversal at lower rates? Secure! Even the most powerful rate reversals have to start somewhere. But nothing about the improvement in the bond market today suggests that this is a strong possibility. Bottom line: We’d need to see a few more days of much better profits before we get too optimistic.