The Colley Team Blog

Last Week, Why Did Rates Rise So Much?
A lot transpired last week that directly impacted mortgage rates.

First, the Federal Reserve stopped buying new mortgage-backed securities. This was not a surprise by any means -- the Fed had been announced a March 31 end date for month, but after all the short coverings had come and gone, mortgage markets traded worse ahead of the expected supply-demand imbalance.

Lower bond prices yield higher mortgage rates.

Better-than-expected data on the economy helped push rates north, too. Auto sales were way up, the Case-Shiller showed strength in housing, and the jobs report was nearly nearly as bad as it looked on the surface.

Furthermore, because of Spring Break, trading volume was thin and that magnified the jumps in pricing.

Overall, mortgage pricing shed 103 basis points, roughly equal to a 0.375% rise in rates.