The end of March saw a period of exceptionally stable mortgage rates, with minimal day-to-day fluctuations. However, this trend started to shift at the beginning of April. Bond markets, a key indicator for mortgage rates, began to weaken as traders started selling, leading to an increase in yields. In the world of bonds, higher yields typically translate to higher mortgage rates.
The initial reasons behind this sudden rise in rates were not immediately clear, although some observers may have attributed it to inflation data released. However, this explanation didn’t fully account for the significant market movement that occurred before yields began to rise.
To exacerbate the situation for rates, economic data released worsened the outlook. Both the S&P and ISM released manufacturing indices for March, which exceeded expectations and highlighted increased prices. Inflation has become a critical factor influencing rates, as persistent inflationary pressures keep rates elevated. Without a reversal in the downward trend of inflation seen towards the end of 2023, there’s little incentive for rates to decrease.
The overall impact of the bond market’s decline was a notable increase of more than an eighth of a percent for the average mortgage lender, particularly on top-tier 30-year fixed loans.
NELLIE DALLMAN, Results Home Mortgage
Chief Operating Officer | NLMS #2419177
763.218.2487
nellie.dallman@resultshomemortgage.com
Get pre-approved!
Nellie has over 15 years of experience in the mortgage, title and banking industry as well as being a Wells Fargo Leaders Club recipient. Nellie can speak and lead from her many experiences. Her enthusiastic management style motivates others towards success. She represents Results Home Mortgage, LLC with professionalism, integrity and confidence. Nellie is committed to building long-lasting business relationships as well and focusing on the continued growth of the company.