CHM Blog

Playing mortgage roulette in a volatile market

It’s anyone’s gamble where mortgage rates are concerned. Economic uncertainty rattled the industry last week—and whatever rates you heard about for the week may not show the full picture, according to economists as reported by Realtor Magazine’s Melissa Dittmann Tracey.

“The 30-year fixed-rate mortgage has been on a roller coaster ride this week,” says the NAR’s chief economist Jessica Lautz. “The bond market is reacting in real time to real-time decisions.”

Tracey relays how last week had it all: global tariff spats, stock market volatility, and news on Thursday of slightly easing inflation. And the Consumer Price Index fell to 2.4% in March—the lowest level since September.

“There’s so much uncertainty and so much disruption; things can quickly change,” Lawrence Yun, NAR’s chief economist at a broker summit in Louisville.

Bet on it. This market volatility is going to leave a mark according to the Mortgage News Daily. “It results in lenders being unable to perfectly keep pace with the underlying bond market,” its analysts say. “The more volatile the trading, the more it costs a mortgage lender to be able to offer any given rate.”

Some home shoppers jumped at the lower rates, helping to fuel an uptick in mortgage applications for home purchases—a gauge of future home buying activity. “Applications climbed 9% week-over-week and 24% year-over-year, the Mortgage Bankers Association reported on Wednesday the highest level in purchase demand since January 2024, a budding sign of hope for the housing market this spring,” says Tracey.

With all this uncertainty, ready home buyers should stay in close contact to find the perfect home and lock in the lowest rate amid daily changes, according to these experts. “Lower mortgage rates will be key to getting the housing market moving,” said Yun. “Once conditions improve for mortgage rates and inventory,” pent-up demand will be unleashed in home sales, he added.

RealtorMag, TBWS

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Lower

Mortgage rates are moving lower today. The MBS market worsened by -150 bps last week. This was enough to increase mortgage rates or fees. The market experienced very high volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1)Tariffs 2) The Fed and 3) Central Banks.

1) Tariffs: The bond market will continue to be very sensitive to primarily the China/US tariff/Trade War discussions.

2) The Fed: We will hear from Fed Chair Powell and many others this week.

04/14 Barkin, Bostic, Waller, Harker

04/16 Powell

04/17 Barr

3) Central Banks: We will get interest rate and policy decisions out of the Bank of Canada and The European Central Bank this week.

Treasury Auction: We have an important 20Y Treasury bond auction on Wednesday.

This Week's Potential Volatility: High

This morning markets are trending towards higher rates. Volatility has started high and will remain that way throughout the week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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