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Is The Worst Over For the Early 2022 Mortgage Rate Spike?

2022 has gotten off to a bad start for the bond market and consequently, mortgage rates.  The pace has been on the aggressive side with the average lender seeing an increase of more than a quarter of a point in a week and 3/8ths of a point in 2 weeks.  The most prevalent 30yr fixed quotes are now in the 3.625% range, up from 3.25% at the end of December.   We’ve seen rates move higher, faster, but very rarely .  When this type of momentum is underway, we batten down the proverbial hatches and wait for some evidence that the sky is clearing.  This will usually take the form of smaller losses and eventually a push back in the other direction.  The first two days of this week have potentially filled that role. Yesterday was a bit more equivocal.  Rates hit their highest levels since the start of the pandemic early in the day, but the bond market stabilized by the end of the day.  Today was slightly more encouraging .  Bonds still lost ground in the morning, but less than yesterday.  They improved steadily from the mid-morning hours following congressional testimony from Fed Chair Powell. In the bigger picture, today’s friendly bounce in the bond market isn’t anything special, but it provided a nice contrast to the AM weakness.  It also gave us our best example of a corrective bounce since the rate spike began in earnest last week.  By the afternoon, almost every lender issued a positive reprice, offering lower rates compared to this morning’s initial offerings.  For context, that leaves the average lender still noticeably higher than Friday, but slightly better than yesterday afternoon.
Source: mortgagenewsdaily.comNew feed

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