Mortgage Rates Paradoxically Steady After Jobs Report

Mortgage rates must really like being where they are right now, because they've been at roughly the same levels for the past 5 days!  Not only is this highly out of character for 2018, it's not even that common in general (might happen a few times a year, historically).  And while the stability was relatively easy to reconcile during the first 4 days of the week, it comes as a surprise today.  

Reason being: the important jobs report was much stronger than expected and bond markets (which underlie rates) reacted in a clearly negative way.  In other words, bonds suggested that rates should move noticeably higher today.  There are two ways to make sense of this.  On one hand, yesterday's bond market movements suggested improvement in rates that never materialized.  In that sense, we were "owed," for lack of a better term. 

On the other hand, rates are more or less up against their long-term ceiling levels and when that happens, the normal cause and effect between bond markets and rates becomes muted.  From a strategy standpoint, this can be useful.  Those inclined to roll the dice with respect to locking their rate could wait to do so until rising rates force their hand.  In other words, if rates aren't eager to move, why bother locking?  The only problem there is that rates WILL move soon, and if they move higher, anyone floating would be forced to lock at a loss in order to avoid the additional losses that such a move would imply.  Most prospective borrowers have been and continue to be best-served by a defensive stance that favors locking.

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