Mortgage Rates Jump to 2-Week Highs
On Wednesday, mortgage rates were indeed at their best levels in more than three weeks. But after two days of relatively abrupt weakness, rates quickly find themselves at the highest levels in two weeks. Adding to the frustration is the absence of any single, obvious motivation for the weakness.
One simple development is "uncertainty." Often times, uncertainty helps bonds because it raises questions about economic progress. Investors move money into bonds (which pushes rates lower) to avoid the volatility or weakness they might be worried about seeing in stocks. In the case of dueling banjos belting out tax reform tunes (both the House and Senate have drafted bills), the uncertainty is more neutral. It doesn't necessarily imply potential weakness or strength in stocks or bonds, so both have given up some ground over the past three days. To reiterate, that's just one of several potential factors at the moment.
Regardless of causality, the movement itself is disconcerting. It places the short-term trend squarely in negative territory (i.e. pointed toward higher rates until further notice).
Courtesy of Rick Lombardo 310.435.7439, Rick.Lombardo@grarate.com, VP of Mortgage Lending at Guaranteed Rate.
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