|Rates Inch Lower, But Not Eagerly
June 29, 2018
Mortgage rates ended the week slightly better off, compared to the end of last week. The general theme, however, was FLAT.
The bonds that underlie mortgage rates took only limited cues from fluctuations in stocks. The latter experienced more volatility due to trade war headlines.
In the bigger picture, we’re still very close to long-term highs. Stocks and bonds (rates) are both on the lookout for an economic shift that may or may not be precipitated by a trade war that may or may not fully develop. Until it does, neither side of the market seems eager to make a big move.
-Matt Graham, Mortgage News Daily
30 Year Fixed Rate Mortgage
Week in Review
Rates shown below are based on the 30 Year Fixed Rate Mortgage
Friday, June 22, 2018 : 4.70% (+0.01%)
Mortgage rates moved slightly higher today. Yet again, underlying bond markets suggested another fate. In other words, if mortgage rates were perfectly tied to underlying bond markets, they would have remained unchanged today.
So why didn’t they?
More detail: “Mortgage Rates Slightly Higher Despite Flat Markets”
Monday, June 25, 2018 : 4.70% (+0.00%)
Conventional wisdom holds that interest rates tend to move in the same direction as stocks. This makes logical sense from a classical investment portfolio standpoint. If investors are selling stocks to buy bonds, the prices of stocks would fall and the price of bonds would rise. When bond prices rise, rates fall. But even with today’s heavy losses in stocks, mortgage rates barely budged today.
More detail: “Mortgage Rates Relatively Unchanged Despite Stock Losses”
Tuesday, June 26, 2018 : 4.70% (+0.00%)
Mortgage rates were flat for the 3rd straight day today, keeping them in a holding pattern just slightly below the highest levels in years. This has been the case for more than a month now, with the exception a brief glimmer of hope at the end of May.
More detail: “Mortgage Rates Stuck in a Summertime Rut (For Now)”
Wednesday, June 27, 2018 : 4.66% (-0.04%)
Mortgage rates finally fell today after remaining flat for the last 3 business days. There are a few possible explanations for the friendly move, but the easiest to see and discuss is the weakness in the stock market. If you read my commentary somewhat regularly, you’ll know that I’m no great fan of using the “stocks vs bonds” explanation for rate movement (bonds = rates), but in today’s case, weakness in stocks was clearly correlated with strength in bonds (stronger bonds = lower rates). Much of this weakness surrounded trade-related headlines, however, so it’s just as fair to say that bonds were reacting to trade war news.
More detail: “Mortgage Rates Finally Make a (Small) Move”
Thursday, June 28, 2018 : 4.66% (+0.00%)
Mortgage rates haven’t been too interested in making big moves recently. Today was no exception. In fact, most lenders’ rate quotes would be indiscernible from yesterday’s. The absence of movement could be good or bad, depending on your perspective. On a positive note, the absence of movement means rates are right in line with the lowest levels seen since the Italian political issues in late May. The other side of the coin is that nearly any day in the past 4 months has seen higher rates than nearly any day in the past 4 years. Trade-offs!
More detail: “Mortgage Rates Flatten Back Out”
Friday, June 29, 2018 : 4.66% (+0.00%)
Mortgage rates haven’t moved for 3 straight days now. In fact, if you’re not too concerned with minutia, there hasn’t been any major movement in weeks. Unless something big happens in financial markets soon, we shouldn’t expect that to change next week
More detail: “Mortgage Rates on Autopilot Ahead of Holiday Week”