Mortgage rates may not be as low as they were before the weekend's geopolitical headlines, but they've moved just a hair lower on each of the past two days. Specifically, our daily rate index is down to 6.19% after starting the week at 6.21% on Tuesday (up from 6.07% last Friday). While there was a large glut of seemingly important economic data today, it didn't have a noticeable impact on the bond market. Part of the reason is that the data in question is very stale at this point.  The most recent monthly data covered November and the GDP release was for Q3 (July-Sep). Timeliness aside, the data was also very close to forecasts. There's even less on the calendar tomorrow, but markets remain susceptible to geopolitical risk and any headlines that speak to the fiscal outlook (tariffs, spending, etc). 

Markets held more sideways overnight as traders awaited further geopolitical developments today surrounding Greenland. Both stocks and bonds lost ground yesterday on the threat of additional tariffs (and counter-tariffs) as well as decreased participation in the US bond market from foreign wealth funds.  When bonds lose ground, rates move higher.  Bond market improvement was tentative earlier in the day but more noticeable in the afternoon when Trump announced "the framework of a deal" just after 2:30pm ET.  Both stocks and bonds rallied on the news. Up until that point, mortgage rates were holding right in line with yesterday's latest levels, but some lenders are offering mid-day improvements this afternoon.

Mortgage rates jumped sharply higher on Tuesday in response to weakness driven by geopolitical events and overseas financial markets. After hitting lows of 5.99% for a few hours on January 9th and spending last week in the low 6's, the average top tier 30yr fixed rate is back up to 6.21% today.  This matches the level seen the day before the announcement of the administration's $200 bln mortgage bond buying plans. The last time rates were higher was December 23rd.  In light of that announcement, why aren't mortgage rates doing better?  Simply put, the market has already reacted to that news to the extent allowed by its transparency. If it were something like the Fed's bond buying initiatives in the past (Q.E. or "quantitative easing," which involved a detailed buying schedule laid out well in advance), it would be easier for rates to drop much more quickly.   As it stands, the market will learn about this new buying plan as it plays out. In practice, this means that there will be certain days where mortgage rates do better than US Treasuries.  And then there will be regular days like today, when both are hurting in roughly equal measure.  As always, there's no way to know if today is a sign of additional momentum toward higher rates. It likely depends on the outcome of present geopolitical issues and upcoming economic data.

Don't stress out. If we ignore the past 5 days, today's mortgage rates are still the lowest since early 2023.  That said, they're up a bit from last week and they moved moderately higher day-over-day. Last week's news regarding Fannie and Freddie's plans to buy $200 bln of MBS (the mortgage-backed securities that directly dictate mortgage rates) made for a rapid drop in the average mortgage rate, but that had largely run its course by Monday. Since then, the market has been finding its range. Mortgages have also been contending with countervailing forces in the broader bond market. Specifically, Treasury yields and Fed rate expectations have been rising. Just today, the 10yr yield finally broke up and out of a range that has held firm for more than 4 months. Mortgage rates have been insulated from that negative momentum in Treasuries (something that would normally imply an equal amount of negativity in the mortgage world) thanks to Fannie/Freddie MBS purchases. 

Mortgage rates moved modestly lower for the average lender today, but higher for others. The distinction is whether the lender in question made a late-day adjustment yesterday afternoon.  At the time, the underlying market for mortgage bonds was improving somewhat sharply. This prompted several lenders to drop rates before the end of business. Those lenders had to bump rates back up this morning as the bond market was in weaker territory this morning.  Other lenders--those who didn't make any changes yesterday afternoon--were able to nudge rates modestly lower today as this morning's bond market levels were a bit better than yesterday morning's.  In the bigger picture, the average lender is still very close to 3-year lows. [thirtyyearmortgagerates]