Mortgage rates fought back today, following their biggest single-day jump in more than 2 years on Thursday.  Today's significant event was the Employment Situation report, which actually turned out to be not too significant for the bond markets that underlie mortgage rate movement.  Given that the report was slightly stronger than expected, and that stronger economic data tends to push rates higher, we can conclude that today's resilience was mostly a factor of yesterday's weakness being overdone.

It's important to understand that today could have gone either way.  In fact, history suggests that big, unexpected spikes like yesterday's are more typically followed by several successive days of movement in the same direction.  There are contrary examples of course, but far fewer. 

In terms of bond market trading levels that ultimately dictate mortgage rates, we earned back almost half of yesterday's losses.  In terms of mortgage rates themselves, the results weren't quite as good.  This is normal behavior for lenders on days that bounce back after big losses.  If bond markets were to hold steady here, lenders would have some room to continue improving today's relatively cautious move back toward lower rates.  Even with today's move, most of the lenders that had moved up to quoting 4.125% on a conventional 30yr fixed are now back down 4.0%.