After the data was released, stock markets rallied sharply higher and the bond market sold off. After hitting new lows on Tuesday, mortgage rates have risen for the last three days.

After weeks of stagnation, stocks finally took their turn in the spotlight today. As money moved out of the bond market and into equities, mortgage-backed security prices fell and lenders were forced to reprice for the worse. Consequently, consumer borrowing costs are higher than they were yesterday afternoon. The damage was not overly dramatic though...

After a better than expected read on 2nd quarter GDP and a not so scary speech from the Federal Reserve Chairman, the 10 year Treasury note yield rose 16.6 basis points and mortgage-backed securities prices fell significantly. This forced lenders to reprice for the worse, which increased mortgage rates. Although consumer borrowing costs rose by about 10 basis points on the week (0.10% of the loan amount), the best 30 year fixed mortgage rates remained in a range between 4.25% and 4.50%.

Much like yesterday, mortgage rates rallied early this morning following weak housing data. Much like yesterday, mortgage rates came under pressure in the lunch hours today as mortgage-backed securities prices fell from intraday highs. Much UNLIKE yesterday, mortgage rates never recovered from that weakness heading into the market close today. The bad news isn't all that bad though....

From 10,000 feet, the story of the week was "Mortgage Rates Rebound from Losing Streak", but when you look closer I think the bigger story was "Mortgage Rates React to Economic Data. Twice!".

Spurred on by a dramatic decline in benchmark debt yields, mortgage rates touched new lows last week. Actually I don't know if I should say mortgage rates hit new lows. Instead, maybe I should say "more lenders were offering record low mortgage rates last week". Yes a few lenders were spotted quoting 4.00% base rates, but the majority of the market was still pricing par mortgage loans at 4.25%. A well-qualified borrower's "best execution" combination of rates and points remained 4.375%. Whatever dip there was ended up being quick because lenders filled their production buckets fast and loan pricing started to suffer on Friday. Since then rates have slowly risen to levels just above record lows (still super aggressive) and loan commitment desks have reported a noticeable increase in consumer mortgage rate locking.

Look for mortgage rates to be indicative of competitiveness in the primary mortgage market. There are several factors that go into the determination of mortgage rates besides the ups and downs of mortgage-backed securities prices. One example of why two similar-sized lenders would be offering different base mortgage rates (before Loan Level Price Adjustments) is the amount of new loan applications they have taken in over the past month.

Lender rate sheets this morning are improved when compared to last weeks. The par 30 year conventional rate mortgage remains in the 4.25% to 4.50% range for well qualified consumers. To be considered well qualified you must have a FICO credit score of 740 or higher. For consumers with lower FICO scores, you should consider a FHA loan which offers similar rates but with higher closing costs.