Mortgage rates have stayed a little higher Monday as bond markets lost ground over the weekend, adding to the heavier losses seen Thursday and Friday last week. Weak bond market equals higher rates, all other things being equal.
Last week was the worst for rates since late February. At that time, bonds were losing ground at the fastest rate since November 2016, and we had to revert to the original. “cone of anger” in 2013 to see something definitely worse. The spike in rates in early 2021 was prompted by a rapidly improving outlook in the fight against covid. It was only when the number of cases stopped falling that the rates stabilized.
At the end of September, the number of cases started to drop quite rapidly. This improves the outlook for the economy and further strengthens the Federal Reserve’s resolve to announce yet another case of “tapering” (a reduction in the pace of bond buying efforts favorable to the Fed’s rates). Unlike 2013, the markets are much better prepared this time around and, in fact, we can attribute some of the weakness in rates seen earlier this year to lower rate expectations.
The average lender is at a eighth to a quarter of a percent higher in conventional 30-year fixed rates compared to the start of last week.