Mortgage rates started the day in bad state after a significant weakness in the bond market overnight. Treasury bond yields have risen by about 0.05%, and this type of move typically coincides with rising mortgage rates almost as much. Today was no exception. The average lender started with actual 30-year fixed rates of around 0.03-0.04% higher than yesterday, which means they were the highest in a year!
Note: when we refer higher “actual rates”, it usually means that the costs associated with yesterday’s rates have moved relative to the rate itself. These upfront costs provide more than fine tuning.
The big engagement today was the Fed’s political announcement, not so much because of any expected policy changes, but rather because of the potential extension of a temporary rule that allowed large banks to buy more bonds. In general, more bond purchases = lower rates, all other things being equal.
Fed Chairman Powell was asked about this extension in the press conference following the announcement, but declined to comment, stating instead that the information would be released. in the next days. This has been good enough for the bond market to recoup some of today’s lost ground and for more mortgage lenders to offer late-day price improvements, albeit small.