Rates keep having bad days:
Mortgage rates spiked abruptly today, bringing them to the highest levels in well over 2 years. The average lender is now quoting conventional 30yr fixed rates of 4.25% on top tier scenarios with more than a few already up to 4.375%. You’d have to go back to the summer of 2014 to see a similar mortgage rate landscape.
The impact on the market, in simple terms:
Fewer prices will seem attractive, but the obvious ones will draw a crowd. Buyers will be pickier, and will wait longer to see if sellers will come down.
Haven’t seen that model Studebaker in years. Looks like it got smacked on the driver’s side. They’re so rare, a full rehab is in order for that pup… said the guy who wouldn’t be paying for it.
Mortgage rates erased yesterday’s losses after today’s jobs report, though not necessarily because of it. The Employment Situation (affectionately referred to as “the jobs”) is traditionally one of the biggest sources of market movement. So when rates make a big move following the jobs report, it’s only natural to assume a cause and effect relationship. That said, most of the credit for today’s move goes other places.
First of all, there’s the simple fact that rates have been trending so decisively higher in general. Just yesterday, I noted that we were increasingly likely to see a rebound as rates continued to push the boundaries of past precedent. In other words, rates have risen about as quickly as they ever have, and it’s common for any financial instrument to blow off some steam in such cases. So that’s part of today’s story.
The other consideration is Europe. There are several important events coming up in Europe over the next week and they’re adding to market volatility. The effects were bad for rates yesterday, but European bond markets (which correlate by varying degrees to US bond markets, and thus, mortgage rates) came charging back today. The drop in Europe’s benchmark rates easily outpaced the drop in US rates, effectively dictating today’s momentum.
Rates ended up falling by the same amount they rose yesterday, making today one of the most abrupt reversals for lender rate sheets, ever! Lenders that had moved up to quoting 4.25% yesterday on top tier conventional 30yr fixed scenarios are now back down to 4.125%.