Mortgage Rates Moved to the Lowest Point in Three Weeks

Mortgage rates moved lower to end 2016, bringing them to the lowest levels in more than 3 weeks.  The last time rates were lower was on December 8^th.   While this is all good news in the context of the past few weeks, 2016 nonetheless ends with one of the worst 2-month losing streaks in the history of mortgage rates.  Specifically, the 5 weeks following the election were the worst 5 weeks on record, going back to the Spring of 1987.  

It is important to remember that nothing about this week's momentum is guaranteed to carry over into the new year.  The reasons why this all occurred could be circumstantial as there has been various concerns that the movement has been to quick, that even though there will be some changes coming up with the new administration, there is no history to back anything as all of this is based upon speculation. 

To repeat yesterday's thoughts, the recent gains are largely a result of the year-end bond trading environment.  It's not the same bond market that's normally pulling the levers behind the scenes.  Volume is lower and participants are in shorter supply.  Trading considerations differ from other times of the year.  It can all add up to unexpectedly quick moves and the appearance of new momentum that is subsequently erased in the new year. 

Again, that's not to say a big bounce toward higher rates is guaranteed next week, but it's at least an equal possibility.  Whatever the case, the past few days of gains cannot be viewed as the sign of a new trend.

I hope that everyone has had a wonderful Holiday Season and I thank all of you for taking time out to read what I must say about the markets and how it affects the mortgage rates.  I extend to you all my sincere gratitude and that the coming year be overflowing with all the good things in life.  Happy New Year!