Mortgage rates No by all means, but they have grown in leaps and bounds over the past 2 weeks. Today has become another page in this story, despite the relatively friendly reaction to the Fed minutes.
What are Fed Protocols? Well, you ask! If you are familiar with the concept of “meeting minutes”, then basically we are dealing with it. In the case of the Fed, the minutes are a clear summary of the discussions that take place during the Fed’s policy meetings. These can be extremely important events for financial markets, especially for the bond market (bonds determine interest rates, including mortgages).
Even though the last Fed meeting was 3 weeks ago, traders are nevertheless eagerly awaiting any clues regarding the Fed’s future decisions. In today’s case, concern has manifested itself in the form of weakness in the bond market ahead of the protocol (weaker bonds imply higher rates) followed by recovery after the Protocols turned out to be rather boring.
What did the Fed say? There are not so many words: “nothing new.” Any information contained in the minutes has long been known during the numerous speeches of the Fed over the past 3 weeks. Moreover, a lot has changed during this time with regard to the delta-induced Covid revival (the Fed’s main problem). If the protocol were unfriendly, many mortgage lenders could raise rates this afternoon. Currently, we have managed to avoid only a moderate increase observed at the beginning of the day (which in itself was more likely a factor in the weakness of the bond market last night).
How does this affect mortgage rates? The average lender is now priced directly according to last Monday morning. Typical top-tier 30-year fixed rates are near the 3% mark, depending on the scenario. Rates still vary significantly between lenders.