Mortgage Rates Continue to Move Lower
What Did Rates Do This Week?
Mortgage rates continued to fall this week following the election, extending their downward trend for a third consecutive week.
A major driver has been the recent selloff in technology stocks, fueled by concerns about AI investments, company valuations, and future growth. As investors pulled money out of the stock market, many shifted toward safer investments like U.S. Treasury bonds. This increased demand helped push bond yields lower, which generally creates room for mortgage rates to improve.
Post-election market reactions also contributed to the decline as investors evaluated what the election results could mean for government spending, inflation, and the economy.
or homebuyers and homeowners, the continued improvement is encouraging, although rates remain sensitive to market volatility.
What to Look Forward to Next Week
Next week, investors will be watching the latest inflation data, particularly the Consumer Price Index (CPI) report, for clues about where the economy and interest rates are headed.
Markets will also continue watching the stock market and developments surrounding AI investments. If technology stocks remain under pressure and investors continue moving toward bonds, mortgage rates could see additional improvement. However, a stock market rebound or hotter-than-expected inflation could put upward pressure on rates.
Lock or Float Bias
Current Lock/Float Bias: Neutral to Slight Float
With mortgage rates trending lower for a third consecutive week, borrowers with longer closing timelines may have an opportunity to float and watch for additional improvement.
However, markets remain volatile, and rates can move quickly in either direction. Buyers closing soon may want to consider locking in their rate rather than risking a sudden increase.
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