Mortgage rates moved modestly lower on average today after doing an admirable job of holding their ground amid weaker market conditions yesterday. That weakness was largely the result of a technical correction to the immense strength seen after Wednesday's Fed Announcement and Press Conference. The following two days have essentially legitimized that strength as something other than a temporary knee jerk reaction.Note: rates are still above the level required for a significant increase in refinance activity. Historically refinance activity picks up significantly when mortgage rates fall about 50 bps from a recent level.
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Most lenders are now quoting a conventional 30yr fixed rate of 3.75% for top tier scenarios. There's more consensus on that one rate than normal. Many lenders that had been at 3.875% are just barely into the 3.75% territory after this week's gains, but underlying market levels are quite strong enough and haven't been maintained long enough for too many lenders to make the foray down to 3.625%.
Based on the relationship between the 30 year mortgage rate and 10-year Treasury yields, the 10-year Treasury yield would probably have to decline to 1.5% or lower for a significant refinance boom (in the near future). With the 10-year yield currently at 1.93%, I don't expect a significant increase in refinance activity.
Here is a table from Mortgage News Daily:
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