Mortgage Rates Roller Coaster Ride

Over the past month and a half we have seen some of the lowest mortgage rates in history! In fact, we have seen THE lowest mortgage rates in history. Interest rates however can move and change in the blink of an eye. Mortgage rates are tied to the financial markets and therefore no one is truly in “control” of where rates are.

If you take a look at the image in this article you will see three distinct and very different trading patterns relative to mortgage rates. The chart shows the price movement of mortgage-backed securities. Mortgage rates are tied directly to mortgage-backed securities and they adjust/move in a direct yet inverse manner compared to mortgage-backed securities.  When the price of a mortgage-backed security goes up, mortgage interest rates go down and vice versa.

The chart below clearly shows you how rates have increased, stabilized and then decreased considerably (relatively speaking) all within the past 30 days.

By Jeremy House

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