After two days of volatile market reactions to the Federal Reserve meeting on Wednesday, Mortgage rates and the Bond Markets continued to show improvement. The market opened today with the following data:

  • 8:35 AM: MBS are up +16bp after Core PCE inflation came in lower than expected.
  • 8:49 AM: MBS have continued to climb and are now up +34bp.
  • 10:00 AM: MBS are up +38bp (UMBS 30yr 5.5 at 98.78), around 25bp higher than yesterday at this time. MBS have rallied this morning after weaker than expected inflation data. The November core PCE price index, which excludes food and energy, rose just 0.1% from October, below the consensus of 0.2%. Core PCE was 2.8% higher than a year ago, the same annual rate as last month. November Personal Income rose 0.3% from October, a little below the consensus of 0.4%. The Dow is down 25 points.
  • 11:57 AM: MBS are up +47bp, around 9bp above volatile morning levels.

Rate Update:

For a 30-year conventional fixed-rate mortgage, the par rate is 6.875%/APR 7.082%, on a $400,000 purchase with 20% down ($320,000 loan) and a P/I payment of $2,102.

The lowest rate available is 4.750%/APR 5.814% with $29,776 in discount points to buy down the rate. This results in a P/I payment of $1,669.

Key Takeaways:

  • Today’s market saw a significant improvement in mortgage rates, driven by weaker-than-expected inflation data.
  • The release of the November core PCE price index, which came in below expectations, boosted market sentiment.
  • This positive movement in the bond market has translated into lower borrowing costs for homebuyers.

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