Mortgage rates continued higher, adding onto a trend that began last Wednesday. A day earlier, rates hit their best levels in more than a month due to political risks in Europe. The trend back toward higher rates has coincided with the defusing of those risks.
Heading into this week, we said rates would be "deciding" if they could remain under a key ceiling. When we're looking at the mortgage market, rates aren't as precise as, say, the US Treasury market. For instance, 2 different lenders could be more than an eighth of a percent off from each other despite almost always moving by the same amount in the same direction every day.
Because of that, it can make sense to follow key levels in terms of 10yr Treasury yields. If mortgage rates could only have one yardstick against which to measure themselves, that would be it. The 10yr yield level in question was 2.94% and that's right where it ended today. Bottom line, the "key ceiling" is still technically intact, but now without any buffer versus current levels. Any weakness tomorrow means we're re-entering a rate range we'd prefer to avoid.