Mortgage Rates highest in 2 weeks

Julie C. Nichols General

Reblogged from Mortgage News Daily – Matthew Graham

Mortgage rates moved moderately higher again higher today, as global financial markets continued reacting to recent geopolitical flashpoints (like the French election, discussed yesterday). Markets are also moving in anticipation of future flashpoints (like tomorrow’s tax reform announcement). In general, investors have piled back into riskier assets like stocks because the French election reduces long-term risks to the European Union. Investors previously were more willing to buy bonds–a safe haven asset frequently used to insulate investors from increased risk.

The prospects for tax reform have a similar effect in that they encourage investors to favor riskier assets at the expense of bonds. When demand for bonds decreases relative to supply, rates move higher.

To be clear, we can’t have any idea whether or not tomorrow’s tax reform announcement will have teeth (in terms of moving markets). In other words, there’s no telling what the actual reaction might be. It’s simply easier for financial markets to take a "lead off" in case the tax announcement creates an opportunity to steal a base.

Nearly every lender is now back at rates not seen since before April 11th (though not quite as high as April 10th). For most, that means conventional 30yr fixed rate quotes of 4.0-4.125% on top tier scenarios.

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