Mortgage rates had another solid day today–this time without any of the early drama seen yesterday. If you’re just getting caught up, the bond market (which drives day-to-day interest rate movement) has been selling off aggressively since the Jan 5th Georgia senate election. When bonds sell-off, it means bond PRICES are getting lower and bond YIELDS (aka RATES) are getting higher. The GA election sparked the move because it gave democrats total control of the government, thus making it easier to pass legislation–especially as it concerns some sort of upgrade to the most recent round of covid-relief stimulus.
Covid-relief stimulus may do great things for people in the short term and for the economy in the longer term, but it does bad things for interest rates (assuming you like low rates, that is). Reason being: the government issues/creates/sells US Treasuries to finance the additional spending. More Treasuries issued = higher yields/rates, all other things being equal, and Treasuries correlate significantly with mortgage rates.
Mortgage News Daily
BY: MATTHEW GRAHAM