Mortgage rates shot significantly lower today after the New Home Sales report showed far fewer executed purchases contracts than expected for the month of July.  The move came in phases with most lenders releasing at least 2 rate sheets.  Some offered bigger improvements, while others got back in line with the rest of the pack.  The net effect was nearly a full eighth of a point drop in average rates for ideal scenarios, bringing best-execution down to 4.625% in many cases while some notable lenders remain at 4.75%. 

Mortgage rates continued lower today after a weaker-than-expected economic report this morning from the manufacturing sector.  Not only does weak economic data put downward pressure on interest rates in and of itself, it also helps firm up the consensus on when and how the Fed will begin reducing its asset purchases.  "Sooner and bigger" is worse for rates, but the more weak data, the more the implication shifts towards "later, less, or both."

Mortgage rates hit their lowest levels in nearly two weeks today.  Conventional 30yr Fixed quotes for the most ideal scenarios (best-execution) are back down around 4.5% for some lenders and remain at 4.625% for many others.  The most visible, mainstream explanation for the move is the geopolitical risk surrounding Syria and the effect global markets.  Such risk can indeed motivate a "flight to safety" where investor demand tends to shift toward the least-risky assets like US Treasuries and out of more risky assets like stocks.  While these two things are indeed happening, the whole story isn't quite that simple.

Mortgage rates bounced higher today, moving back in line with Monday's levels.  Conventional 30yr Fixed quotes for the most ideal scenarios (best-execution) are back to 4.625% on average though some lenders are an eighth higher or lower.  Frustratingly, this is one of those days where there is no overt "cause and effect" for the movement whereas yesterday's could more readily be chalked up to geopolitical risks surrounding Syria.

Interestingly enough, when Syria seemed to have been a source of market movement yesterday, we characterized it as the easiest mainstream explanation, with the whole story being less simple.  It's those "less simple" factors that came into play today.  In an effort to be sure they received their adequate treatment yesterday, today's move higher was basically accounted for in advance.  Here are the relevant parts of yesterday's comments:

Mortgage rates began the day in slightly higher territory, but most lenders adjusted rate sheets mid-day, bringing the average rate just below yesterday's latest offerings.  Underlying market conditions are as much a culprit in the welcome turnaround as anything.  Conventional 30yr Fixed quotes for the most ideal scenarios (best-execution) are still most readily found at 4.625% though some lenders are an eighth higher or lower.

The typical correlations between economic data and market movements broke down to some extent (for the 4th time this week) due to lighter participation among traders and looming geopolitical uncertainty surrounding Syria. In the same way that markets refused to take rates any lower on Tuesday afternoon, they weren't eager to take them any higher this morning.  It continues to be the case that the biggest movements will be dependent on more thorough market participation, which isn't guaranteed to show up until next week. 

Mortgage rates had an uneventful day, moving sideways on average.  Some lenders were almost perfectly unchanged, while others were slightly higher or lower than yesterday's latest levels.  In virtually all cases, the only thing that would change about a rate quote from yesterday to today would be a slight difference in closing costs (as opposed to a movement in the "note rate" itself).  As such, conventional 30yr Fixed quotes for the most ideal scenarios (best-execution) remained at 4.625% though some lenders are an eighth higher or lower.

It's easy to look at numbers on the computer or TV and think of financial markets as simply being open or closed.  For instance, most radio listeners hear an update on stock market averages in the middle of the day and assume markets are open for business as usual, but some days depart from the usual.