Boring Day For Rates, But Not "Good" Boring

The mortgage market is no stranger to excitement in 2022.  Unfortunately, it hasn't been the good kind of excitement.  That's especially true of the past few weeks as rates pushed back up to long term highs.  After yesterday's upside surprise in the Consumer Price Index (a key inflation report that frequently causes volatility in markets), rates surged up to match the highest levels in 14 years.

Today's market movement was significantly more boring.  The bonds that underlie the mortgage market were exceptionally calm today.  In fact, they really didn't move from 11am to the close of business, nor did they really change from yesterday's latest levels.  

This sounds like good news at first glance, but it's only good in the sense that today wasn't as bad as yesterday.  Reason being: it generally left 14-year highs intact for most lenders.  

Rates are likely to remain defensive until they see more economic data in the coming days and, more importantly, until they hear from the Fed next Wednesday.  Between now and then, volatility remains possible, but the seeds of the next big picture shift cannot even be sewn until Fed day.  

Lenders continue to offer rates in the low to mid 6% range.  Many loans continue to require a historically high amount of upfront cost due to pricing constraints in the mortgage bond market (i.e. investors aren't offering premiums to buy loans that run a high risk of being paid off the moment rates drop enough for a refi to make sense).