HomeLoans Blog

Mortgage rates move up and down based on the price that investors pay for various mortgage bonds. It is call the mortgage back security market.

And with bonds, if the price increases, then mortgage rates decrease.

If bond prices decrease, then mortgage rates increase.

Today, there was a good bit of investor interest in buying Treasury bonds. These Treasury auctions are not tied directly to mortgage bonds, but they have much influence over the direction that mortgage bond prices move.

Today was a good Treasury auction, and mortgage bonds benefited.

The movement was so significant, basically reversing a very bad day yesterday, that I am beginning to be inclined to look for a real trend reversal.

We will see next week, but it may very well be that mortgage rates have hit the top of the range and may begin to drift back lower.

I truly think that we have passed the lowest of the lows, and that the trend this year will be for higher mortgage rates.

But hey guys, we are not yet in stable recovery - unemployment is high! and housing is suffering! Still! and getting worse!

It is not yet time for rates to move higher,

and it looks like January may come with lowering mortgage rates.

Have a great New Year's!