Mortgage rates moved deeper Today the average lender is being brought to its best level since late February. Despite the milestone, the daily interest rate development was quite mild. Most lenders make changes that only show up in the form of upfront costs (also known as “points”) as opposed to the interest rates themselves. If we use up-front costs and rates to extrapolate an “effective rate”, the average movement on any given day was 0.01-0.02%.
Over the past 6 days, interest rates have been more likely to go lower than higher, but this in and of itself carries some risks. Market participants who trade in securities whose underlying mortgage rates are based tend to shy away from additional purchases as soon as these profit streaks last longer than 7 days.
With all of this in mind, our potential 7th consecutive winning day will arrive tomorrow at the same time the market will be processing the big jobs report released that morning. Last month’s report was one of the first irrefutable examples of responses to economic data since the pandemic began. So tomorrow’s numbers definitely have the potential to push interest rates up or down. The presence of solid recent gains means the bar for additional improvement is a little higher than usual.