Mortgage Rates End Week on Hopeful Note

Mortgage Rates End Week on Hopeful Note

Mortgage rates found their footing today, moving sideways to slightly lower after losing ground the past two days. Earlier this week, rates hit their lowest levels in 3 years. While today's improvements don't quite get us back there, they keep us very close. Perhaps even more importantly, underlying bond markets ended the week with an even stronger move toward lower rates.Lenders set rates based primarily on trading levels in mortgage-backed-securities, a bond-like financial instrument that tends to move in the same direction as 10yr US Treasuries and by a similar amount. It's not uncommon for lenders to shy away from aggressively adjusting rate sheets to reflect changes in trading levels on a Friday afternoon.

As such, if markets are merely in somewhat similar territory at the beginning of next week, rate sheets should be even better. In other words, the market improvements came too late in the week to have a big effect on mortgage rates, but that means we start out with an advantage next week, unless bond markets happen to be in very rough shape.