Markets Rallied and Rates Improved Last Week

Wall Street Could Have Raised the Rates

The mortgage market resumed its winning streak last week after a 1-week hiatus. Markets rallied into the weekend and mortgage rates eased lower overall. It’s the third week out of four that rates improved and, ironically, rates may have dropped last week because traders were watching the wrong metrics.

With respect to housing, analysts found August’s Existing Home Sales and New Homes Sales reports disappointing.

Both posted weaker-than-expected sales volume, sparking a stock market sell-off that led bond markets higher.

It was the wrong reaction.

Versus home supply, the number of monthly sales isn’t nearly as important to the national housing recovery and the supply of homes fell in August. If Wall Street had been paying better attention, mortgage rates may have risen instead.

The supply of homes for resale fell nearly a month, and of new homes by 0.3 months.

Specifically, What Did Those Reports Say?

Each week, I put up an economic calendar of news coming out that following week. Here’s the what actually happened with those reports last week:

What Impacts Mortgage Rates?

If you’re looking to purchase or refinance a home, it’s important to know what moves mortgage rates. There are normally two major things that impact the direction:

Economic News. (Like the calendar above).
International News. (major events, pending legislation, war related news, etc).
Stock Market. (Money flows from equities (stocks) to bonds when it seeks shelter).

What Are Rates Based On?

It’s been mentioned before, but as a common reminder – mortgage rates are only based on one thing, Mortgage Backed Securities (MBS). The only way you have access to these is through live bond quotes.

Looking For Mortgage Rates?

If you’re looking for specifically what mortgage rates are doing, I’d be happy to help with a custom rate quote. Each scenario is different (there are 27 different factors a mortgage rate is determined by). If you or someone you currently know are looking for a mortgage, I’m here to help!

Information without obligation. That’s my policy. If you like what you hear, my team and I would love to help you out with your mortgage!