It's a fluid situation in financial markets on Wednesday. The 2-week ceasefire in the Iran war caused a big reaction last night, but the benefit to the bond market (bonds dictate rates) has been increasingly wiped out during domestic hours.  If we measure the reversal versus yesterday's closing levels at 5pm ET, the reversal is almost complete. But bonds were already rallying in the afternoon due to expectations for the official ceasefire news. All that to say, we're still in noticeably better shape than we were mid-day yesterday, but the overall improvement is smaller than most borrowers would expect. In fact, the average top-tier 30yr fixed rate is just barely at the low end of April's range at 6.40% vs the previous low of 6.41% on April 2nd. Earlier today, it was as low as 6.38%, but mortgage lenders made mid-day changes in response to bond market deterioration. 

In stark contrast to the entire month of March, April's mortgage rate volatility has been downright boring. To put this in context, the average top tier 30yr fixed rate rose a substantial 0.65% by March 27th. In the first five business days of April, they've held inside a range of just 0.04%. Today did nothing to expand that range although it did leave rates microscopically higher versus yesterday. The Iran war continues to be the dominant source of inspiration for the financial markets, including the bond market that underlies interest rates. Given that tonight brings a deadline for a potentially major escalation in the war, there's a risk of volatility heading into tomorrow.

It was an uneventful day for mortgage rates with the average lender close enough to Friday's levels that borrowers would not see much of a difference between the two days. The bond market (which underlies and dictates rate movement) was still in quasi-holiday mode as most overseas markets were closed for holidays. Financial markets (including bonds) continue taking cues from major developments in the Iran war, but today ended up being more about waiting for those events based on Trump's deadline for Iran to reopen The Strait of Hormuz or face major escalation.

On any given Thursday, there's a decent enough chance that the average mortgage rate headline will be unintentionally misleading. At issue is media reliance on the longstanding weekly mortgage rate surveys. If news stories are going to cite this data, that's fine, but it's critical to understand the methodology. Whether it's MBA (reported yesterday) or Freddie Mac (reported today), the weekly surveys have an inherent reporting lag--that is, they are published at least a day after data collection ends. In addition, they represent an average of 5 business days.  This means that the weekly mortgage rate would be reported as 6.2% if the first 4 days were 6.0% and the 5th day jumped to 7%.  This is most frustrating for consumers when the present moment's rates are higher than the weekly average. Thankfully, today's case is the opposite. The most recent long-term rate high occurred on March 27th, and we've moved noticeably lower since then. Today didn't add much to that move, but it nonetheless brought the average lender to the lowest levels since March 18th. [thirtyyearmortgagerates]

Mortgage rates were little-changed on Wednesday, despite the release of several economic reports and another deluge of war-related headlines. In the slightly bigger picture, the market is trading with some sense of hope of a finite timeline for the war. Today, that meant a moderate drop in oil prices and bond yields (aka "rates"). Bonds struggled to maintain the improvement after this morning's economic reports which were broadly stronger than expected. In general, stronger econ data suggests higher rates, all else equal. In addition to stronger employment and retail sales reports, a key manufacturing report showed much higher inflation--also something that pushes rates higher. All of the above having been said, there really wasn't a major reaction to any of this morning's scheduled events/reports. If anything, bonds and rates have been roughly sideways in a narrower-than-average range. The average mortgage lender was lower than yesterday by 0.02% on a top-tier 30yr fixed rate.