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Mortgage rates swing with intraday bond market moves
Mortgage lenders set initial daily rate sheets using bond prices around 9:30 to 10:00am ET, but bond deterioration after that can push rates higher by the next update.
Mortgage rates are proving difficult to compare day over day because bond markets move intraday, Mortgage News Daily reports. Lenders typically publish the first rate sheets for the day based on bond market prices around 9:30 to 10:00am ET, but rates can shift if bonds move enough later.
The outlet notes that bonds improved enough in the afternoon to support lower rates for many lenders yesterday, yet today is slightly worse when compared with yesterday afternoon examples. However, compared with yesterday morning levels, today’s rates are slightly better, though the underlying direction depends on which reference point is used.
Mortgage News Daily says a practical way to track the mortgage rate backdrop is to watch underlying bond movement, using 10-year or 5-year Treasury yields as an approximation. It adds that both Treasuries and mortgage-backed securities suggest rates are roughly in line with yesterday morning levels at the time of its article.
The complication is that bonds have lost ground since the morning mortgage rate sheets were issued, meaning that if bonds do not improve between now and tomorrow morning, average lenders would likely offer slightly higher rates, according to Mortgage News Daily.