Mortgage rates were mixed today depending on the lender, but moved just slightly lower on average. This wasn't the case this morning as essentially all lenders came out with noticeably lower rates following the weaker-than-expected Retail Sales report. As the day progressed, early gains in bond markets faded, especially after the afternoon's 30yr Bond auction. While that refers to 30yr Treasuries, the goings-on in the Treasury market always have some effect on the mortgage-backed-securities that dictate mortgage rates. Today was no exception, and as prices fell into the afternoon, most lenders 'repriced' to higher rates.
The fact that some lenders have yet to reprice likely accounts for the discrepancy between them. If we assume that non-repricing lenders will either reprice before the end of the day or build the weakness into tomorrow's rate sheets, we're left with that "sideways to slightly lower" rate situation on average. That puts us very close to the lowest levels in March, seen on the first two days of the month. Most lenders are quoting conventional 30yr fixed rates of 3.875% to top tier borrowers. A few of the stronger lenders are at 3.75% and fewer still remain at 4.0%.
The notion that rates are near the lows of the month contrasts starkly with most mortgage rate headlines this morning. Those headlines are not wrong. They're just stale. Here's why:
Every Thursday, Freddie Mac releases their weekly mortgage rate survey, which is the longstanding industry standard for a delayed look at at mortgage rate offerings. It is important to keep that delay in mind though. Reason being: Freddie releases the report at 10am (or slightly earlier under embargo) to news outlets who then all rush to report the same headline on Thursday morning. But the data for the report is based on survey responses received primarily at the beginning of the week, and as we know, even a single day of big market movement can have a big effect on rates.
So any time that there is a good amount of movement in the same direction over the course of the week, and especially if the previous Thursday/Friday saw rates move in the other direction, Freddie-based headlines will no longer to apply to the rate reality at the time they are printed. That's exactly what's happened over the past week as rates surged higher on Friday. By the time Freddie's survey was open for responses this week, rates had only just begun falling. Some of the bigger moves came in after most of the survey responses were in. As such, today's rates are actually lower than they were for last week's Freddie report, despite today's data showing a sharp increase.