Mortgage rates continued their upward trajectory today as positive economic data fueled investor optimism and pushed bond yields higher. The market opened with a modest increase in mortgage-backed securities (MBS), but quickly reversed course as stronger-than-expected import price data weighed on sentiment.

Market Movements:

  • Early Trading: MBS prices initially rose by 3 basis points (bps).
  • Mid-Morning: Prices surged higher, reaching a gain of 19 bps.
  • Late Morning: A significant shift occurred, with MBS prices plunging by 9 bps. The 30-year fixed-rate mortgage (FRM) par rate stood at 6.875% with an APR of 7.088%.
  • Late Morning Update: MBS prices further declined by 16 bps, settling below some of the volatile early morning levels.

Economic Data Impact:

  • Import Prices: November import prices rose 0.1% month-over-month, exceeding expectations for a 0.2% decline. This data point suggests underlying inflation pressures may persist.
  • Dow Jones Industrial Average: The Dow traded lower, reflecting concerns about rising interest rates and their potential impact on the economy.

Rate Analysis:

  • Par Rate: For a 30-year FRM on a $400,000 purchase with 20% down, the par rate is 6.875% with an APR of 7.088%. The monthly principal and interest (P&I) payment on this loan would be $2,102.
  • Lowest Rate: The lowest available rate is 4.750% with an APR of 5.728%. However, this significantly lower rate requires paying $26,829 in discount points to buy down the rate. The resulting P&I payment would be $1,669.

Disclaimer: This information is for general knowledge and informational purposes only and does not constitute financial, investment, or legal advice.