Mortgage Rates Battle Back; Volatility Ahead

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Posted To: Mortgage Rate Watch

Mortgage rates made up some of their recently lost ground today, moving slightly lower in concert with falling stock prices. Bonds (which include the mortgage-backed securities that dictate mortgage rates) don't always follow movements in stocks, but the two can often be sending the same message regarding investors' view of risk. When investors favor risk, they tend to seek the higher potential returns associated with stocks. When investors seek stability, they tend to favor bonds. Now, there are plenty of days where both can be moving the same direction for a variety of reasons, but today wasn't one of them. Bonds got the nod, meaning more investors wanted to front the cash in exchange for fixed payments over time. Think of it like "lenders competing for your business." More competition =...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/496996.aspx

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