Mortgage Rates Stay Flat Even With Movement in Bond Market
Mortgage rates were flat this week, continuing a stretch of barely budging over the last few weeks.
The very limited movements in rates have come as the bond market – something that normally drives mortgage rate dynamics – has experienced some increased volatility, as uncertainty of a new fiscal stimulus prompted Treasury yields to fluctuate over the last couple weeks. The main thing keeping mortgage rates from moving in tandem is the spread between bond yields and mortgage rates, which remains very wide relative to recent years. Demand for mortgages is still very strong and many lenders appear to be keeping rates higher, in order to moderate the inflow of borrower requests and account for perceived risk.
While this limits the potential for mortgage rates to move notably lower, it also limits the risk of a sharp uptick in mortgage rates should Treasury yields head higher quickly.
