Mortgage rates continued somewhat higher on Monday as bond markets lost ground over the weekend, adding to the heavier losses seen on Thursday and Friday last week. Bond market weakness equates to higher rates, all other things being equal.
Last week was the worst for rates since late February. At that time, bonds were losing ground at the fastest pace since November 2016, and we'd need to go back to the original "taper tantrum" in 2013 to see anything definitively worse. The early 2021 rate spike was driven by a rapidly improving outlook in the fight against covid. It was only when case counts stopped dropping that rates leveled off.
Now in late September, case counts have begun to drop fairly quickly. This improves the outlook for the economy and further steels the resolve of the Federal Reserve to announce another instance of "tapering" (a reduction in the pace of the Fed's rate-friendly bond buying efforts). Unlike 2013, markets are much more prepared this time around, and in fact, we can credit tapering expectations for some of the weakness in rates seen earlier this year.
The average lender is at an eighth to a quarter of a percent higher in conventional 30yr fixed rates compared to the beginning of last week.