Mortgage Rates Stay Strong to End Quarter

Mortgage Rates Stay Strong to End Quarter

Mortgage rates trickled slightly lower today, technically taking them to another in a string of 3-year lows over the past 2 weeks. The most recent, most noticeable catalyst for the move toward lower rates is the passing of the referendum for the UK to leave the EU (aka "Brexit"). Given the bounce back in stocks since last Friday, it's tempting to conclude that financial markets have "gotten over" their initial apprehension regarding Brexit.

But the bond markets that underly mortgage rate movement haven't bounced back in the same way. In fact, they haven't really bounced back at all. Exploring the underlying reasons for rates remaining near all-time lows despite stocks being closer to all-time highs would be a major undertaking for a simple update on mortgage rates. Suffice it to say that bond markets are looking at the longer-term, bigger picture, and they're seeing the "new normal" that Fed Chair Yellen spoke of 2 weeks ago. Specifically, Yellen said the factors holding rates lower "could be part of a new normal."

In this sense, Brexit isn't its own catalyst for rate movement, but rather just another symptom of the same disease of slower global growth and lower inflation. Lenders continue to offer 3.375% on top tier conventional 30yr fixed quotes though quite a few remain at 3.5%.