Market Overview
Mortgage rates experienced volatility this week as bond markets processed geopolitical tensions. Following the three-day holiday weekend, traders returned to find overseas markets pushing bond yields higher.
Two primary factors influenced rate movement. The lesser issue involved fiscal turmoil in Japan that prompted heavy selling of Japanese bonds. The more significant driver was geopolitical — European markets reacted to the administration’s escalating stance regarding Greenland, and the most noticeable trading volume spike followed news that “a Danish pension fund was pulling out of Treasuries.” From Tuesday onward, bond markets stabilized through week’s end.
Mortgage Rate Performance
Mortgage rates were impacted by Tuesday morning’s bond market weakness, pulling back to levels preceding the January 9th decline that followed the administration’s MBS buying announcement. Notably, mortgage rates are significantly outperforming Treasuries due to this announcement and subsequent MBS purchases — providing insulation against the pace of Treasury rate increases.
Mortgage Application Data
Mortgage Bankers Association (MBA) data demonstrated strong demand response to recent rate improvements. Refinance applications predictably surged following the rate rally, while purchase applications advanced to their highest level in three years. Overall mortgage applications reached their highest level in nearly four years.
Current Rates
| Loan Type | Rate |
|---|---|
| 30-Year Fixed (MND) | 6.19% |
| 15-Year Fixed (MND) | 5.79% |
| 30-Year Fixed (MBA) | 6.17% |
| 30-Year Fixed (Freddie Mac) | 6.00% |
What’s Ahead
Next week includes several economic reports, with the Federal Reserve announcement being the most newsworthy event. Markets currently assign zero percent probability to a Fed rate cut, though Chair Powell’s press conference may provide insights into the March 18th meeting approach.
Source: US Housing Market Weekly — Jay Bridges, Mortgage Lender, Priority Capital Corporation