Mortgage rates unexpectedly increased yesterday afternoon as the U.S. stock market staged a late rally.
By the end of the day, the Dow Jones Industrial Average (DJIA) was up 1.9 percent, or 247.77 points.
This is a typical pattern.
When stocks are moving higher, investors want to ride the wave and look for sources of cash. Often, bonds serve as that source.
Now, remember that mortgage rates are based on the price of mortgage bonds. When bonds are in demand, bond prices increase and the associated rates fall. When bond are being sold -- as what happened yesterday -- prices decrease and that pushes mortgage rates higher.
That's what happened yesterday.
As the DJIA added 150 points in the last two hours of trading, mortgage rates rapidly worsened. If you locked your rate in the afternoon, it may have been markedly worse than if you locked in the morning.
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You are so very correct about this change in the mortgage pricing! It doesn't seem that many see that, but I would have to agree with you! Have a great holiday weekend!
Thanks, Ronald. Have a great one, yourself!
I'd like the DJIA to rise back to the high 13K mark... then make another run over the 14K mark... and settle for awhile.
I think the rises in Mortgage rates are not a 'bad thing'. It's not like they are at 13% People can get a VERY GOOD loan rate in today's market.
You are correct in that people SHOULD CONSIDER locking in their rate if they are borrowing.... but with the market volatility.... a person could guess wrong.
Have a super weekend.
Thanks for that, Rob. Ultimately, the borrower has to weigh the facts and, hopefully, decide what's in their best interest.
Up and down. Up and down. And tomorrow....
Rob's comment about 13% is to the point. I was a real estate developer when first mortgages were 17% and seconds were 21.5%
Does this sound like "when I was a boy, I had to walk to school. Two miles! In the snow! Barefoot!
Yeah, Mike. It does - just a little. LOL Thanks for visiting.