Mortgage rates moved decidedly higher today, bringing most lenders back in line with their highest recent rate sheet offerings from November 12th. In many cases, this may result in a quoted rate being an eighth of a percentage point higher today compared to yesterday, depending on the lender and scenario. In other cases, the weakness will be seen in the form of higher closing costs or lower lender credit. With today’s rise, the most prevalently quoted conforming 30yr fixed rate for ideal scenarios (best-execution) is moving up to 4.5% though some lenders remain better-priced at 4.375%.
There is a lot to consider with this move higher. Certainly, the holidays can affect bond market trading, especially in the mortgage-backed-securities (MBS) that most directly influence mortgage rates. The most common side-effect is that there are fewer market participants at work making for a less liquid secondary mortgage market. Fewer participants and lower volume means that prices (and therefor rates) can move more quickly than they otherwise might. We’ve definitely seen some of this, and on such occasions it’s not uncommon to see a bit of a correction back in the other direction after an extend holiday weekend.
Such a correction is best thought of as something to hope for versus something to plan on. In the bigger picture, it’s more likely that rates have just returned to a mid-point after the recent run at the lows in October. That would suggest they begin next week in more of a neutral stance, ultimately taking their biggest cue from Friday’s jobs report