In the world of interest rates, it’s good to be a mortgage today. The dominant species on that world is US Treasuries: the quintessential dollar-based loans (after all, they are loans to the US government). Loaning dollars to the entity responsible for the dollar is about as foundational as it gets, but I digress.
Treasuries and mortgage rates tend to move in the same direction and by generally similar amounts. That’s because mortgage rates are based on underlying bonds (mortgage-backed securities or “MBS”) that are fairly similar to Treasuries in most of the ways investors care about. The prices of MBS dictate where lenders can and should set their interest rates, but ultimately, it’s up to the lender. If they’re flush with business and want to slow things down, they might set rates a bit higher. The same thing can happen heading into a weekend during times of elevated volatility.
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Source: mortgagenewsdaily.comNew feed