A significant reversal in mortgage interest rates.no commitment to sustainability
If you just get caught mortgage interest rate Yesterday it surpassed 7% for the first time since 2002. Read our article to learn more about why interest rates are everywhere. Yes, mortgage interest rates are now over 7%, but it’s complicated.
Today was a completely different day. In fact, not only did interest rates fall below yesterday’s levels, they also fell retroactively to the end of last week (some lenders say Thursday afternoon). This wasn’t always the case early this morning, but almost all lenders adjusted rates during the day. Often multiple times.
Mortgage interest rates are based on bonds. When bonds rise enough, mortgage lenders issue these “intraday price changes.”
Why was Kizuna so happy? Happiness is not the right word. “Relieved” would be more appropriate. Fiscal policy announcements in the UK have been at the center of all the drama over the past few days and while it hasn’t been withdrawn or changed, monetary policy decisions in the UK helped calm financial markets this morning. I got
In short, the UK government has made a statement that will surprise investors greatly. The Bank of England then announced an emergency bond-buying operation to ease their fears. His 10-year yield in the UK has fallen more than half a point in 40 minutes. U.S. Treasuries followed cautiously by comparison, as they followed in the course of the rally (the U.S. bond market has moved less than half as far as the U.K.).
All the gains in the bond market translated pretty well into mortgage-backed securities, which the average lender was finally able to pull back well into the 6 level. For those wondering if all the “bad things” are done, there is no way of knowing. What we do know is that nothing about today’s Bank of England announcement by itself guarantees a sustainable reversal.
There are still reasons to be cautious about the outlook for interest rates. Additional incentives, and particularly weakening economic data (including moderate inflation), are needed to ensure interest rates fall in the big picture. That said, whenever a major central bank unexpectedly throws large amounts of cash into the bond market, good things tend to happen to interest rates. So, we don’t have to wait for recession data if other central banks do the same in the near future.