Mortgage rates continued higher today, after breaking a very long, very flat streak following last week’s jobs numbers. Like yesterday, today’s culprit was stronger-than-expected economic data, this time from the national Institute for Supply Management (yesterday’s was the regional Chicago ISM). The losses were more pronounced, however, bringing the most prevalent 30yr Fixed conforming rate quote (best-execution) up to 4.25%.
Part of the problem into the end of this week owes itself to the trading levels that ultimately underlie and inform mortgage rates. In addition to economic data and other market fundamentals, trading of a particular security can also be informed simply by the past precedent of that security itself!
For example, if a stock price bounced several times in a row at $35.00 and moved down to at least $25.00 every time it bounced, we might conclude that the next bounce at $35.00 is also likely to result in a move to $25.00.