Down 25 bp already this morning (meaning rates have opened higher this morning). Stock market has opened up higher as well which proves ONE of the factors that lead to mortgage rates increases.
This proves a very interesting point, and creates a general “rule-of-thumb” that shows the correlation between stocks and bonds.
To sum it up, mortgage rates usually get better if Nasdaq sells off (stock market goes down) and will get worse if the Nasdaq rallies (stock market goes up).
This is because money managers and mutual fund companies typically keep funds in either stocks or bonds with very little in cash. If stocks are in favor, money is pulled from bonds, causing bond prices to drop and interest rates to possibly rise. When stocks are being sold off, the money is then parked into bonds, which improves bond prices and may cause interest rates to decline.
As for today, the Jobless Claims already have come out with a reported increase of 17k, up to $474k.
Hope you took our advice yesterday and secured your new home loan or refinance.
I’m pretty sure the damage to MBS has already been done this morning, so I’d recommend floating if you didn’t lock yesterday. You already took a hit, so now its time to minimize your damage. If anything changes, I’ll be back.
