Mortgage rates have held firm this week, despite notable changes in the bond market that typically would drive rate changes.

In a volatile stretch due to the fate of the next round of fiscal relief, among other factors, Treasury yields trended upward in recent days to reach their highest levels in more than three months. Normally a move like this would be accompanied by an uptick in mortgage rates, but so far, rates have barely budged. In fact, rates fell slightly in the last two days and remain close to all-time low levels. Typically, Treasury yields and mortgage rates have a close relationship, with a movement in the former usually dictating a change to the latter. However, the pandemic has frayed this relationship, and mortgage rates remain much higher than you would expect them to be – given the level of Treasury yields.

While the upward move in Treasurys does increase the likelihood of mortgage rates eventually moving higher, it appears that rates do have a bit of a buffer before they head in that direction, and generally it means that it will take a larger increase in Treasurys before we see mortgage rates head higher.