Mortgage lenders rely on the bond market to generate mortgage rates. In addition to being fully closed on Monday for Memorial Day, bonds also close 3 hours earlier than normal on the preceding Friday (i.e. today). The abbreviated trading session was fairly uneventful for rates despite some back-and-forth volatility in response to diplomacy headlines surrounding Iran/US peace negotiations. The flow of news resulted in better bond market levels early in the day and a pull-back in the late AM hours. After accounting for some lenders' mid-day rate changes, the average lender ended the day right in line with yesterday's levels which were also incidentally right in line with last Friday's levels. 

After posting a decent recovery from 9-month highs yesterday, it looked like mortgage rates were destined to bounce back toward slightly higher levels today. In fact, when lenders released their initial rates this morning, the average 30yr fixed rate was indeed moderately higher. But shortly after 1pm ET, news broke regarding additional progress in the Iran war peace process. Much like many similar headlines of late, this one could easily unravel in the coming hours, but the bond market responded positively enough to erase the day's losses. In general, when bonds are gaining, rates move lower. Today's intraday gains allowed lenders to "re-price" to lower rates. The average lender was just slightly lower than yesterday's latest levels as of 3pm ET. On the plus side, lower is lower, and that's a victory for today. On the other hand, rates are still very close to long-term highs in the bigger picture. Additionally, and to reiterate a point above, we've seen these sorts of news stories come and go with markets ultimately erasing the initial move after the next set of headlines push the narrative back in the other direction. Bottom line: this was a decent intraday gift, but we're not viewing it as a definitive pivot point in rate trends. 

Wednesday brought some much-needed relief for the mortgage market after rates surged to new 9 month highs of 6.75% yesterday. Whereas that rate spike was decoupled from the prevailing narrative of war-related headlines, today's recovery was quite the opposite. Newswires came out shortly after 10am ET that suggested the U.S. and Iran are nearing a final draft of a peace agreement. While such news has been prone to correction and revision, the market was nonetheless willing to respond quickly and rather forcefully. Oil prices dropped sharply with Treasury yields in tow. In the bond market, "yield" is another word for "rate." And because mortgage pricing is directly dictated by mortgage-specific bonds, when yields are falling, mortgage rates will almost always be falling as well. The average lender fully erased yesterday's rate spike, ultimately making it back below the levels seen on Monday afternoon. Granted, Monday's levels were still the highest in many months at the time, but we have to start somewhere. At the very least, today's market movement reiterates the fact that rates will likely make an even better recovery when the war is officially over. [thirtyyearmortgagerates]

It was another rough day for the bond market and, thus, for interest rates. Investors aggressively sold bonds in the first 2 hours of trading, taking 10yr Treasury yields to the highest level in more than a year. Mortgage-specific bonds have been doing better versus Treasuries in recent months thanks to increased purchase demand from Fannie Mae and Freddie Mac. All else equal, higher demand for mortgage bonds = lower rates, relatively. In the current case, it means mortgage rates haven't moved up as much as Treasury yields over the past 6 months. That said, rates have still definitely moved higher. Today's top tier 30yr fixed rate is up to 6.75% for the average lender--the highest since July 2025, and a whopping 0.75% higher since before the Iran war began. This makes it the fastest rate spike seen since late 2024. [thirtyyearmortgagerates]

Mortgage rates hit their highest levels in more than 9 months at the end of last week. Now today, they've edged slightly higher yet again with the average top tier 30yr fixed rate at 6.68% versus 6.65% on Friday. This wasn't necessarily destined to be the case today. In fact the day began with the average lender unchanged. But the underlying market remains highly attuned to breaking news on the Iran war. Earlier in the day, that news was helpful for rates as it spoke to the possibility of compromise on a peace deal. Subsequent headlines refuted the initial news, thus pushing the financial market back in the other direction (i.e. toward higher rates). The result was that the average lender recalled their initial rate offerings and re-released higher rates. Things were on track to be even worse this afternoon when Trump said he was cancelling a planned attack and that serious negotiations were taking place. This helped bonds recover some of the earlier losses, but not enough for lenders to make any friendly rate adjustments today.