Mortgage rates remained in line with 2017’s lows today, despite noticeable improvement in underlying bond markets.  Under normal circumstances, bond market improvement equates fairly directly with mortgage rate improvement, but things aren’t exactly normal lately.

On the simplest level, the timing of market movements over the past 2 days tells the story.  The prices of mortgage-backed-securities (MBS) are right in line with those seen yesterday morning when most of yesterday’s rate sheets came out.  Bonds and MBS weakened yesterday, but not enough for most lenders to change rate sheets before the end of the day.  In that sense, today’s bond market strength allowed for lenders to keep rate sheets unchanged whereas rates would have been slightly higher had bonds been flat on the day.

Tomorrow morning brings an important piece of economic data–the Consumer Price Index or CPI.  This is a key inflation report and one that’s moved markets noticeably the last few times it’s come out.  It could certainly have an impact again tomorrow.  Bonds/rates are in position for a weaker reading.  While rates could improve if CPI is weak enough, there’s more inertia waiting to push rates higher in the event the data is stronger than expected.