Mortgage rates managed to remain unchanged today despite the fact that underlying bond markets were stronger.  Stronger bond markets are typically associated with lower rates, but in today's case, markets had some catching up to do.

At issue is the timing of yesterday's weakness. Bond markets had lost ground throughout the day (something that can sometimes result in lenders changing rates in the middle of the day).   A few lenders indeed pulled the trigger on such "mid-day price changes," but the average lender did not. Simply put, that left the average lender with a little bit of weakness to price into today's rates. The moderate amount of improvement in underlying bond markets was just enough to offset that implied weakness, thus leaving the average lender unchanged.

The stakes remain high as tomorrow's data and events present further challenges.  The potential for volatility is higher than it was in August, and rates have generally been trending higher in September.