Mortgage Rates are Incredibly Volatile

After a HUGE drop in the mortgage bond market last Thursday, on Friday the mortgage bond market experienced one of the craziest trading days I have ever seen as the market opened up 50 basis points first thing in the morning. Then, I received an Alert to Lock at 9 am as pricing has dropped by over 30 basis points. Then, later in the day the bond market rallied in a big way and I received an Alert to Float. I told you in January to expect more volatility, but this is CRAZY!

On Monday the mortgage bond market opened up strongly, but I received an Alert to Lock by 9:30 am; but the bond market recovered and closed up by 23 basis points. This is good news; but the volatility is too much.

I can see mortgage rates being 2.75% or 3.75% in the next 2 weeks as the market is so incredibly volatile. And the Treasury will be auctioning off new 10 year and 30 year debt on March 10th and March 11th. If these 2 auctions go like the last 4 auctions of new debt with terms of 7 years or longer, don’t be surprised if mortgage rates are 3.50% or 3.75% on March 12th.