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Mortgage rates took a significant dive today as the bond market rallied in response to a broad global stock market selloff.

The day began with MBS (mortgage-backed securities) jumping by 25 basis points (bps) at 8:34 AM. This upward trend continued, reaching a 22 bp increase by 10 AM, with UMBS 30-year 5.5 at 101.06. This represents a substantial 34 bp climb compared to Friday’s levels.

The economic indicators released today also influenced the market. The ISM National Services Sector Index came in at 51.4, exceeding expectations of 51.0, while the Global Services PMI slipped to 55.0, aligning with forecasts. Despite the positive service sector data, the Dow Jones Industrial Average plunged by 1,100 points, driving investors towards bonds and subsequently lowering mortgage rates.

Rate Update:

For a 30-year conventional fixed-rate mortgage on a $400,000 home with a 20% down payment, the par rate currently stands at 6.125% (APR 6.333%), resulting in a principal and interest (P&I) payment of $1,944. However, borrowers willing to pay discount points can secure a lower rate of 4.750% (APR 5.434%) with a P&I payment of $1,669. This option requires a $17,286 upfront payment.