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Mortgage Rates Up Slightly, But Still in Great Shape

Mortgage rates rose modestly today after spending the past 2 days moving sideways.  It was really yesterday's market weakness that caused today's move.  Mortgage rates are most directly affected by the trading of mortgage-backed securities (MBS).  When MBS are weaker, rates rise.  MBS were weaker throughout the day yesterday, but not by quite enough for lenders to go to the trouble of revising their rate sheets for the worse.  Instead, lenders simply waited until this morning to make the changes implied by the market.  This delayed reaction is common when the market movement on any given day isn't quite enough to justify lender reprices.

In the bigger picture, rates have been in a holding pattern, possibly waiting for some indication that the government shutdown will end.  When such a thing happens, it likely presents a negative risk for rates--at least in the short term.  After that, it will take some time for the government's economic data to begin flowing again, and it will be that economic data that will ultimately have a bigger say with respect to interest rate momentum.

For now, rates remain in strong territory relative to the past 9 months.  They've only been lower for a handful of days during that time, and not much lower!

This Daily Mortgage Rate Update is provided in partnership with Mortgage News Daily.