Mortgage rates moved higher for the 3rd straight business day. That said, last Friday is better described as being a “2nd consecutive day of all-time lows.” Even yesterday, the average lender was able to quote rates under 3% for top tier conventional 30yr fixed scenarios. Today’s upward pressure was a bit more noticeable as markets cheered a Retail Sales report that was much stronger than expected. In general, stronger data is good for stocks and bad for bonds (and when bonds are weaker, rates move higher).
There’s a particular concern to be aware of in the world of mortgage rates–especially for those who are counting on additional improvements. Simply put, the underlying bond market hasn’t really been making a case for additional improvement. If anything, the case is for gradually higher rates. It’s only because mortgage rates were late to the low rate party (relative to Treasuries) that they’ve been able to hit all-time lows so recently. Treasuries, meanwhile, are already sounding the alarm by trending slightly higher in yield for at least 6 weeks.
None of the above means that rates can’t or won’t hit another all-time low in the near or distant future–just that the prevailing trends make it decreasingly likely for the time being. A significant deterioration in economic data or the coronavirus outlook could change things. Conversely a significant improvement in either of those factors could serve to accelerate a rising rate trend.