Mortgage Rates Head North Quickly

Mortgage rates headed North today after hitting one month’s lows yesterday.  I was a bit surprised as rates fell on Monday morning as the weekend produced no meaningful updates on the recent healthcare bill. However, Speaker Ryan and several “unnamed sources” per CNN have confirmed that the bill remains a priority for the House and they want to "get it right" without putting a timeline on it.  When this was announced, rates shot back up as yesterday’s decrease was not justified.

Today’s jump brought us back to the turns we saw in just three weeks ago, when rates started to move upward – and just as quick as they did today.  That means Monday's rate improvements no longer have the same justification.  As such, rates shot quickly back into last week's range.

Yesterday, I mentioned that there has been a lot of chatter about a big correction – but with that, we saw today the rally in the stock market.  When this occurs, the other turn of events has the yield on the 10yr also increasing, bring the mortgage bond markets with it.

Couple this with the March Consumer Confidence Index, which had its strongest reading since August 2001, and Vice Chair (Fed) Stanley Fischer confirming the three rate hikes this year, a perfect storm hit and we saw an abrupt change in bond markets.  It became the most compelling motivation for fence-sitters to consider locking that I have seen in a few weeks.

In summary, the benchmark 10yr note was unable to make new lows today.  So, I believe the wise choice is to look at locking in if you are within 30 days of funding.  Only loans I would consider floating would be for people who can afford to wait and roll their chances that this might be short-lived.