With yesterday mortgage rates already near long-term lows, all it took was a slight improvement for today’s rates to officially hit their best levels since February… The strong move in the bond market (which dictates rates) was more than enough.
Back in February, we went through the current betting range along the way UPand there was little reason to believe that we would return to these levels given the current realities, if any. SpecificallyThe number of COVID cases is about as low as it has been since the start of the pandemic. The economic data was strong. Inflation rates are gaining momentum (inflation is bad for rates). And the Fed is increasingly talking about cutting back its interest rate-friendly bond buying programs.
But, as is always the case, the markets tried to set prices in as much of the future as possible when the rates were risingand now they’re trying to get ahead next move (the one where the upward trend is cooling down). In fact, they’ve been doing it for months now, knowing that the Fed’s friendly policies will remain unchanged, at least until this fall, and that the boom in economic activity associated with the resumption of activity will eventually level off.
While there are still positive economic anecdotes, there are as many informs about this concept of alignment. Combine this with shopper fatigue / apprehension (housing, cars, stocks), growing concern about the delta option, expectations of lower inflation and a noticeable leveling off in vaccination rates, and it’s easy enough to reconcile a healthy rebuff with what has been shaping up to be a year of rising rates. …
The average lender may once again plunge into high 2 when it comes to common top tier buying scenarios. Refinancing rates are still slightly higher, especially when paying out in cash.