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For the past 2 weeks, the mortgage rates had been slowly climbing higher. On 3rd January some lenders, experienced this because of heavy selling in the bond market as primarily the mortgage rates are based on bonds.
Today these lenders had to raise rates a little more as bonds continued to deteriorate. Forcing lenders to adjust rates upward.
The overall effect is, the average conventional 30yr fixed rate is now around 3.37%. For the past 2 months, the rates have been hovering around 3%.
At the moment, the bond market has several issues but the most important one is the raise in the new omicron variant.
Traders were already prepared for the raise in covid case counts, but it is not an effective way to calculate statistics as we don’t know if it would be in the same manner as previous waves.
The growth of bonds depends on fear of the future, confusion, and safer bet. If the pandemic eases it will result in rates going up.
Reference Source: Mortgage News Daily
