Mortgage rates have moved moderately higher for the average lender at some point over the past couple of days. Some lenders bumped interest rates yesterday afternoon, so they didn’t need to make a major adjustment today. Other lenders who held steady yesterday are forced to make bigger changes today. As always, the motivations for such decisions are primarily related to the levels of trading in the bond market. When bonds lose ground, the price of the bond goes down and the yield (aka “price”) increases. This means that we can often see a common rate benchmark such as the 10-year Treasury yield moving in concert with mortgage rates. In fact, 10 cent yields also hit a two-week high. Tomorrow brings the latest announcement from the Federal Reserve (Fed). The market is already expecting another rate hike of 0.25%. Instead, it will be the verbosity with which the elevation is delivered that matters. The federal funds rate does not directly dictate mortgage rates. In other words, mortgage rates could drop tomorrow even if the Fed raises. They could also move higher depending on what Powell says about the Fed’s policy stance.
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