Mortgage rates held steady today, which is better than what could be said for most of last week when rates shot up to the highest levels in 7 years.  Friday was the only day of improvement, but it was scarcely enough to undo the damage from the previous 4 days.  That said, it did raise questions.  Specifically, was Friday some sort of indication that the worst was behind us in terms if upward rate momentum?

Answering that question is tricky business because the time frame matters greatly.  In the short term, there's always a possibility that a prevailing trend toward higher rates will cool-off and reverse course.  While that's also technically possible over longer time horizons, we can begin to talk more about probabilities and less about random chance.  With that in mind, we've be discussing the general momentum toward higher rates for many months now.  Rest assured it will be big news when and if it changes.

Until then, assume that underlying risk of gradually higher rates remains intact, and that it will continue to be mitigated by periodic corrections toward lower rates.  Unfortunately, in addition to being relatively less common, those friendly corrections haven't really helped rates make up much of the lost ground.  As such, last week's same bottom line still applies: it will take a much bigger, much more sustained move in bond markets for lenders to make meaningful changes to mortgage rates.  Until then, it makes sense to remain defensive in terms of locking vs floating.