“Navigating the Current Mortgage Market: What Homebuyers and Homeowners Need to Know”

Yesterday, we mistakenly described mortgage rates as “sharply sideways,” a term typically used for uneventful days. But today’s lack of volatility was even more significant. However, when looking at the underlying factors, things become more interesting. Surprisingly, the bond market, which determines rate movement, showed strength today. Normally, bonds improve in weak economic conditions and with strong demand for Treasury bonds. In contrast, today’s economic data was stronger than expected, and the auction of 20-year US Treasuries was lackluster. Despite this seemingly negative situation, bonds improved, and mortgage rates remained at yesterday’s low levels. This puts lenders at levels similar to those in May 2023. Tomorrow, we anticipate significant economic data that could influence bond markets and, consequently, mortgage rates. However, as we approach a slow period for bond trading, rates may not necessarily align with economic indicators, introducing uncertainty. One thing we do know is that clear, actionable inspiration from scheduled data won’t be available until the first week of January. Although mortgage rate volatility will persist, it is expected to remain relatively subdued until then.