Mortgage Rates End 2-Day Winning Streak; Existing Home Sales/Prices Slip Despite More First-Timers

Mortgage Rates End 2-Day Winning Streak; Existing Home Sales/Prices Slip Despite More First-Timers

Mortgage rates couldn't maintain last week's impressive move lower following the Fed Announcement. At the time, rates were moving lower for ECONOMIC reasons. At the risk of oversimplifying, the Fed essentially conveyed a gloomy longer term outlook on the economy and this tends to put downward pressure on rates. The economic outlook is only one of the factors that affect rates. Supply and demand in the bond market is also a consideration. Higher supply causes sellers to lower prices to compete. When prices fall, rates rise. This was the case today as bond markets coped with an unexpectedly large glut of supply. Mortgage rates were less affected than other sectors because the bonds that underlie mortgages weren't the subject of the increased supply. That said, they are interconnected with other