Mortgage rates had a reasonably calm and logical day–not something we’ve been able to say very often recently. It was calm in the sense that today’s average rates didn’t fall too far from yesterday’s and intraday movement wasn’t too extreme. It was logical in the sense that the improvement coincided with stronger trading levels in mortgage bonds.
That logic is typically taken for granted. After all, if mortgage bonds are improving, it means investors are willing to pay higher prices for mortgages. Paying a higher price for a bond/mortgage is the same thing as being repaid a lower yield (i.e. interest rate). In other words, investors are willing to accept lower rates, so it’s exceedingly logical for mortgage lenders to offer lower rates as a result.
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Source: mortgagenewsdaily.comNew feed