Sep 5 2014, 4:11PM
Mortgage rates were lower out of the gate this morning after the weaker-than-expected jobs report fueled bond market gains. As bond prices rise, rates fall. But bonds–specifically Mortgage-Backed-Securities or MBS (which dictate mortgage rate pricing)–are constantly moving throughout the day while lenders only put out 1-3 rate sheets per day. This depends on volatility and on many days, there is only one rate sheet. Today was not one of those days for most lenders.
As the day progressed, bond markets weakened substantially. Eventually, we’d lost everything gained in the morning. Most lenders ‘repriced‘ to higher rates at least once during the slide. Some of them are now in worse shape than they were last night, though others are still slightly better. 4.125% remains the most prevalently-quoted conforming 30yr rate for top tier borrowers.
This brings the week to a close with rates having moved higher every single day. While some of that could have to do with broader ebbs and flows that occur in the trading world around the end and beginning of the month, it’s still potentially disconcerting. With yesterday’s announcement from the European Central Bank and today’s weak jobs numbers, we had 2 major events at the end of this week that more logically suggested lower rates. The fact that the underlying momentum was able to overwhelm these would-be allies suggests we remain cautious. These are the sorts of clues that can precede a sustained push to higher rates. Next week will let us know much more about whether or not that’s happening.