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Today’s headline is the most dramatic part of today’s story on mortgage rates. From Sept 2022 the average top tier 30yr fixed rate is mostly operating in the 6-7% range. There were several weeks in the low to mid 7s in October/November and a few days in early March. Then the mini banking crisis broke out and sent rates to the bottom of the range. Since then, working 7%, it’s coming back to you, babe.
Credit the progressive improvement in bank sentiment, mixed but resilient economic data, and a Federal Reserve that has been steadfast in its reminders about its “high for a long time” rate mantra. The ongoing dispute over the debt ceiling is noise playing in the background, and while it can cause intraday volatility, it is not something that will provide any sustainable interest rate momentum, for better or worse.
Rates were already pretty close to 7% yesterday and only took a gentle push today. Interestingly enough, the underlying bond market currently suggests lenders could drop below 7% tomorrow, but only if current trading levels hold (they almost never do).
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