One popular refrain in the mortgage industry is that rates take the escalator en route up and the stairs en route down. The other day was absolutely an “escalator” sort of day with the typical lending institution going up 0.12% for a top-tier 30yr set rate.
Based on enhancement in the bond market, rates are lower today, however simply barely. It’s not so much that rates are taking the stairs down, however more like they’re a child, waiting at the top of the staircase– scared to take that first step. Some lenders are not even lower compared to the other day’s levels. Others are just modestly much better.
The lack of better enhancement is at least partially attributable to the slower motion in the underlying bond market. Specifically, today’s bond rally (helpful for rates) is less than one third the size of yesterday’s sell-off (bad for rates).