Mortgage Interest Rates Down as Stock Market Declines

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Mortgages rallied last week as U.S. 10yr treasury yields fell 14bps on the week, the strongest performance since April 2017. The S&P 500 and DOW fell 4.60% and 4.50% for the week on Friday, -2.33% and -2.24% respectively, and are now back in the negative territory for 2018. The 2s5s curve inverted for the first time since 2007 and the 2s10s curve is near 13bps this morning. However, the curve steepened into the end of the week as the market continued to price out the Fed interest rate hikes in 2019. Market expectations are pricing near 50% probability for a March interest rate increase and near certain hike next week.

Mortgage Rates increased into month-end last week.

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Mortgage Rates increased into month-end last week before dropping on Friday with the tax bill being the main

“Bunch of keys on a chart, showing rising tendency. Metaphor for success, real estate, …”

focus for markets all week.

Source: Caliber Home Loans

Mortgage rates fell last week during the shortened trading week

FOMC_Meeting

Last week mortgage rates fell during the shortened trading week. Existing home sales rose in October after under-performing for most of 2017. October durable goods were weak, but this came after a very strong September (upwardly-revised), so the market didn’t pay much notice.

Mortgages got their direction for the week on Wednesday when the minutes from the November FOMC meeting kept December tightening on-track but painted a picture of a deeper split at the Fed between those who want to continue to tighten / normalize and those who worry about continuing to raise rates into low inflation.

Source: Caliber Home Loans

Mortgage Rates Tick Upwards

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Mortgage rates increased last week with the European Commission’s boosted growth forecasts being the main culprit, while selling of European Debt is dragging down U.S. Treasuries and MBS prices. Equity Prices also declined last week, with confidence that Congress will be able to pass a tax cut bill this year beginning to wane.

Source: Caliber Home Loans