Mortgage rates hold their ground despite bond market volatility

Mortgage interest rates are directly linked to bond market trading levels. When bonds have a bad day, interest rates tend to rise. So was the interest rate associated with US Treasuries (also formally called “yield”), but the mortgage market held its ground more effectively.

Part of the outperformance is no doubt due to mortgage lenders adopting more conservative pricing strategies last Friday. But still, mortgage-specific bonds outperformed Treasuries. This has to do with Treasuries facing a few more hurdles this week. The above hurdles relate to different forms of “supply”, with more supply leading to lower prices and lower prices leading to higher yields/yields. All other conditions are the same.

This is a bit arcane for our purposes, so we can say that mortgage-backed bonds have had better days than others, and mortgage lenders have had a bit of room for improvement regardless of the bond market. These factors have allowed the average lender to offer slightly lower interest rates compared to last Friday, but the improvement is small enough that the average borrower will only pay in the form of lower initial costs. you’ll see it.

Despite today’s modest win, the stakes remain very high into the weekend. The Consumer Price Index (CPI) was released on Thursday, but no other report has had such a big impact on 2022 interest rates.

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