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Mortgage Rates Continue Retreat from Last Week's Highs

Mortgage rates continued lower on Monday, further undoing much of the damage caused by last week's run to the highest levels in over 2 years.

Mortgage rates continued lower on Monday, further undoing much of the damage caused by last week's run to the highest levels in over 2 years. Friday's important Employment Situation Report began this process, but as the market's response grew more equivocal in the afternoon, lenders weren't in a safe position to move rates any lower.

Today changed that MBS (the "mortgage-backed-securities" that most directly influence mortgage rates) not only improved, but held those gains very stably into the afternoon. MBS "gains" translate to lower rates. The most efficient combination of upfront cost and monthly payment for Conforming, 30yr Fixed scenarios (best-execution) moved down to 4.625% in some cases, but several lenders remained at 4.75%.

Although today was positive for mortgage rates, it was also a slow day for the bond markets (MBS are part of the bond market) that underlie them. Though the level of activity will probably increase a bit tomorrow, there's a similar lack of calendar data to inspire movement. As such, we're simply seeing some of the defensive attitude from Friday afternoon simply relax nominally today. While this could be the beginning of a broader consolidation ahead of next week's important Fed Announcement,...

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Matthew Graham