The Truth About Mortgage

Mortgage rates are a little better today, but it might not be worth celebrating. The reason isn’t great, as it typically isn’t. This time it’s pending home sales, which just hit a fresh record low going all the way back to 2001. That pushed bond yields lower on the day, which will translate to slightly… 

Each month, Fannie Mae releases a forecast for home prices, sales, and mortgage rates, among other things. Between September’s report and October’s, they raised their estimate for the 30-year fixed a staggering 80 basis points (0.80%). The unusually large move reflects just how bad mortgage rates had it over the past month and change. But… 

Mortgage rates have now fallen for five days in a row. That puts the average 30-year fixed mortgage around 7.375%, a three-week low and roughly a quarter point below where they were earlier this month. The strange part is that it happened right as we received two hotter-than-expected inflation reports in CPI and PPI. Oh,… 

Now it’s a party. A day after the mortgage rate rally seemed to end, then pulled off a miracle same-day turnaround, they’ve moved even lower still. The 10-year bond yield nearly slipped back below 5% today as bonds all of a sudden look attractive and tech stocks feel risky. There was always going to be… 

Well, what we didn’t want to happen, happened. We got a hotter-than-expected CPI report this morning, sending bond yields surging higher. After three straight days of slightly-better mortgage rates, there was some real promise we could make a more meaningful move back toward the low-7s. But alas, the 10-year yield is about 5 bps higher…