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Mortgage Rates Drop
After a fantastic day on Tuesday and frustrating little bounce after yesterday’s Retail Sales data, mortgage rates have fully recovered back to the recent lows.
Any time rates move enough to merit a discussion, it coincides with a similar move in the broader bond market. Bonds are currently highly susceptible to economic data (as seen on Tue/Wed).
Whereas Wednesday’s data pushed bond yields and interest rates higher, Thursday’s data sang a different tune. weekly Jobless Claims (not to be confused with the big monthly “jobs report” that comes out on the first week of any given month) were higher than expected and several other reports also spoke to a modest uptick in economic headwinds.
The economy may not like headwinds, but what’s bad for the economy is generally good for bonds/rates. Today was no exception. As bonds erased all of yesterday’s losses, interest rates moved back in line with best recent levels. For some lenders, that was Tuesday. For others, it was last Friday.
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Housing Starts for October were reported at a 1.372 Million annual unit pace, which is up 26,000 from last month’s revised report of 1.346 Million, and above estimates of 1.35 Million. Housing Permits, which are a good indicator of future starts, increased to 1.487 Million units. This is up 16,000 from last month’s figure of 1.471 Million.
9:31 AM: Stocks have started the day higher. The Dow is +73.83 at 35,019.30 and the S&P 500 is +4.59 at 4,512.83. Mortgage Bonds are +6bp at 101.25.
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Seems like there’s light at the end of the tunnel.