At face value, today was a loss for mortgage rates. The average lender is quoting a slightly higher rate for conventional 30yr fixed scenarios compared to yesterday, and you'd have to go back more than 4 months to see more than a day or two with higher rates.
That's the bad news.
The good news is that there have been some signs of resilience in the bond market that underlies interest rate momentum. Almost any consumer interest rate can be traced back to trading activity in the bond market. Mortgage rates are no different.
If you're looking for a great approximation for mortgage bond movement, the industry has been keeping an eye on the 10yr Treasury yield for decades. There are certainly moments (or years?) where that correlation breaks down, but it's reasonably well behaved these days.
Why so much explanation on 10yr Treasury yields? Because I'd like to talk about rate trends against that backdrop for a moment. Treasuries are also a bigger, more active market than mortgage bonds, so they may be worth a bit more in terms of trend identification.
10yr Treasury yields have topped out at the same level (or very close to it) for the past 4 days or the past 6 days depending on your definition of "close to it." The point is that the trend is suddenly flat after having been decidedly vertical during the previous 2.5 weeks.
Even inside today's intraday trading, we saw initial weakness (read: higher rates) followed by a nice little recovery. That recovery allowed some mortgage lenders to offer mid-day price improvements. This wasn't enough to get the average lender back into positive territory versus yesterday, but if the gains are still around tomorrow morning, that could change.
In the bigger picture, we need to look beyond tomorrow to events like next week's jobs report and the following week's CPI data in order to witness a confirmed bounce at a rate ceiling or an unfortunate breakout to higher highs.
