Mortgage rates saw a decrease to approximately 6.89% today, driven by weak economic indicators and favorable spreads despite ongoing inflation concerns and a hawkish Federal Reserve. This marks a notable drop from a recent high of 7.26%. Economic reports—including significant declines in the ISM services index and job losses—contributed to prospects of lower mortgage rates, as deteriorating data could curb bond yields. The outlook hints that for rates to surpass 7.25%, stronger economic performance is needed while current trends suggest possible stability in mortgage prices due to enhanced spreads.
Mortgage rates have dropped to around 6.89%, influenced by weak economic data and favorable mortgage spreads, despite concerns over rising inflation and a hawkish Federal Reserve.
The recent improvement in mortgage spreads has prevented rates from skyrocketing, effectively establishing a ceiling at around 7.25%, amidst various economic challenges.
Today's ISM service sector data showed a significant decline, which along with job losses and lower home sales, suggests economic contraction and poses questions for future rate expectations.
Forecasts suggest that for mortgage rates to rise above the 7.25% mark, the economy needs to exceed expectations, while weaker data may lead to lower yields.
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