We made the mistake of referring to mortgage rates as being "sharply sideways" yesterday--a description that's only dusted off for the most uneventful of days. Joke's on us! Today's sideways-ness was possibly even sharper! That said, it was a bit more interesting by the time we consider what went on behind the scenes.
Long story short, the bond market (which determines day to day rate movement) was paradoxically strong today. Bonds usually improve when economic data is weak and when Treasury demand is strong. Today's data was stronger than expected and the scheduled auction of 20yr US Treasuries was lackluster.
Despite those seemingly negative cues, bonds improved and mortgage rates were able to remain as low as they were yesterday. For the average lender, this is right in line with the best levels since May, 2023.
Tomorrow morning brings the week's heftiest slate of potentially significant economic data (the stuff that can the bonds that, in turn, can move the rates). That said, it also brings us one day closer to a very slow time of year for bond trading. That means we could continue to see more paradoxical movement with rates not necessarily following the advice of the econ data.
That's a lot of uncertainty! One thing we actually do know is that we won't have obvious, actionable inspiration from scheduled data until the first week of January. Mortgage rate volatility won't disappear, but it should remain relatively more muted between now and then.