Mortgage Rates Remain at Highest Levels in Seven Years Despite Stock Market Commotion

Mortgage rates have held steady for the most part, absorbing a turbulent week in the stock markets without much commotion themselves.

Conventional wisdom suggests that large declines in equities – this one the third largest weekly dip since the financial crisis – should coincide with reductions in U.S. Treasury yields, which are a benchmark for mortgage rates. In this instance, however, bond markets failed to react as strongly as wisdom would suggest: Rates dipped slightly but quickly leveled off and have remained mostly steady.

Rates did experience a modest increase on Wednesday, however, following the release of Federal Reserve minutes detailing its commitment to continued gradual rate hikes into next year.

Overall, while the volatility in rates that began earlier this month appears to be subsiding, rates remain at their highest levels since 2011 and showing no signs of a retreat. A steady stream of weak housing data, with more expected over the coming days, have thus far failed to put a dent in rates’ upward momentum. Beyond housing, there are few major economic data releases scheduled for the next week, so rates are likely to hold steady.