Mortgage Rate Price Tracker 🏠📉🔍 MAR (Week 4)
Monitoring the change in price of specific mortgage rates
Included in this post are the following:
THE TRACKER 🔭
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Most mortgages are sold into mortgage-backed securities (MBS) and the price of these bonds determines rates for all banks and lenders.
However, mortgage rates DO NOT rise or fall. Instead, the price of each rate changes while the rates available to you remain the same.
The Mortgage Rate Price Tracker (MRPT) illustrates this dynamic by showing how the price of each rate changed within the time series.
The higher the rate, the lower the fee (points). Some higher rates pay a rebate; this is illustrated on the tracker with negative (-) points.
When the “total change” is negative it means a reduction in the price of the rate.
The MRPT is a “rate and loan program” specific example of the LendZen Index, which monitors a much broader set of rates and mortgage bond coupons.
Both are effective for visualizing how the PRICE of mortgage rates has changed, while the LendZen Index is published daily at LendZen.substack.com
WEEK 4 📉
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Since the LendZen Index has a variety of time series, the MRPT will focus on just the current month’s activity.
Attached are the results for March Week 4.
You can also explore the results from prior weeks by searching the Price Tracker tag.
OBSERVATION:
There is A NEW HOPE for mortgage rates as we hopefully put the March sell-off behind us.
However, the damage has been done to mortgage rate prices, in what will likely take months to correct.
Anyone who didn’t lock in February, and waited for a bounce back in March, is now likely seeing the same rate options priced at least 200 – 300 higher.
RATE RECAP ⏪
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Hopes were high for the spring homebuying season after mortgage rates finished February at the best levels in years.
Fast forward to the end of March and mortgage rates not only lost considerable ground, but retraced the entire rally which started after August’s Non-Farm Payroll kicked started a jobs market recession narrative that carried into the new year.
The bond market bloodbath was unfortunately felt more acutely in mortgage bonds, as the spread between MBS yields and the 10-Year Treasury went from a low of 73-basis points (0.73%) in January to as high as 114 bps.
Widening spreads combined with an inflation-driven bond sell-off resulted in skyrocketing mortgage rate PRICES.
Lower MBS coupons are always impacted the most, as the lower bond yield means greater losses from inflation.
The result was lower Note rates (i.e., 5.25%) increased as much as 344 basis points.
This means securing the same rate today vs. February 27 could cost you $3,437 more per $100k of loan amount.
So far this week a combination of optimism out of the Middle East and mild economic data has helped mortgage bonds claw back last week’s losses with a two-day rally.
Meanwhile, let’s hope the Friday jobs report (NFP) can strengthen the reversal with a bond rally reminiscent of last summer.
Thanks for reading.
If you want to shop real-time mortgage rates and get instant qualification results without providing any contact information visit LendZen.com
LendZen provides a fully automated mortgage shopping experience that gives you anonymous access to all mortgage rates with full transparency of costs upfront as bond prices change.
You can also request an official Loan Estimate for the exact loan you created and save your scenario to revisit your rate options daily with one-click.
See for yourself and experience hassle-free mortgage shopping at LendZen.com
DISCLOSURES
LendZen Inc. is an equal opportunity mortgage lender, NMLS 375788.
