15 July 2009 ? Bonds opened down 16bps today and continued to get worse throughout the day. Currently (2:45 p.m.) bonds are down 68 bps which is pressuring the mortgage interest rates. This is the 3rd straight day that we have seen the bond market drop and as I mentioned in Monday?s update there was some news that would affect the bond market. The predictions were that bonds would get worse and it unfortunately it has turned out to be true. While we finally tipped into the 4.875% 30-year rate for the well qualified consumer we have quickly retreated to a 30-year rate of 5.125% with most buyers ending up around 5.25% to 5.375%. Again, in two days we have seen the mortgage rates spike .25% and we may continue to get worse before flattening out.
The stock market has enjoyed three excellent days of gains and typically when the stock market starts to rally there will be pressure on the bonds. While concerns about inflation seem to have brewed they are not really valid at this time. However stronger manufacturing results and slightly higher consumer inflation were the two reports that have caused the spike to mortgage interest rates.Email This Post To a Friend.