Last Friday the average mortgage lender jumped their rate by about 1/8%. That’s a very big move for a single day–the kind that only happens a few times a year.
Rates are only slightly higher so far this week, but the pace has been very modest by comparison. This is a bit of a blessing and a curse. On a positive note, it’s always nice when rates stop rising abruptly. On the other hand, the underlying bond market (which dictates rates) continued to sell off today.
In other words, what is happening in bonds says rates could go higher. There are two reasons there wasn’t much of a rate jump. First, some of last Friday’s move was overly defensive. That’s not abnormal on days where rates spike following a big piece of news. In addition, there is some late day weakness in bonds that has yet to translate to lenders’ mortgage rate offerings.