Mortgage rates are rapidly approaching long-term lows

Despite the glaring absence of truly encouraging events, interest rates managed to record two fairly significant days of movement. In today’s case in particular, there was a clear intraday surge in the underlying bond market. Although this increase was not directly attributable to data or news headlines, it prompted many mortgage lenders to reissue lower rates in the afternoon.

As conventional 30-year fixed rates move down from 6.3 towards 6.1, this is an area that may see larger movements than normal for reasons outlined in early September (A quick note on why rates seem to fall more quickly as they approach certain thresholds).

We’re starting to see some of this slippery slope behavior in our rate index over the past few days, as 6.125% moves closer to a more prevalent prime rate quote.

As always, the real question is whether we will continue in this direction or expect a rebound. As always, there is no way to know in advance. The level of improvement observed over the last week is already undoubtedly surprising.