Mortgage rates edged microscopically lower today, though some lenders were unchanged from Tuesday’s latest levels. this morning. Bond markets (which set the tone for mortgage pricing) improved forcefully overnight, led by European bond markets. That suggests lower rates to start the day, but markets began moving in the other direction just before lenders put out their first rate sheets of the day. The net effect is the merely tepid improvement. Lenders’ caution was justified as bond markets never threatened to move back toward overnight levels. The most prevalently-quoted conforming 30yr fixed rates remain 4.125% and 4.25% depending on individual details and the lender.
The rate outlook can be either encouraging or disheartening depending on how you choose to view it. On the one hand, these rates are still near the lowest levels of 2014. Additionally, rates have shown a remarkable ability to stay near those lows for a longer stretch of time than normal. Finally, to whatever extent European turmoil (weak economic data and geopolitical risks) continues pushing European rates lower, the spillover effect is increasingly likely to help US rates move lower.
The disheartening view is much simpler. In short, rates can’t seem to break through the floor! Whether we’re talking about actual mortgage rates or the broad-scale posterchild for bond markets–the 10yr Treasury yield–both continue bumping into the same floors that blocked their progress in July. Additionally, neither have made any serious attempt to get back below the 2014 lows seen in late May.