A significant surge in mortgage rates has been noticed today. It is a surprise change considering the rise mortgage rates witnessed during initial days of this week. If we take a look at the scenario on Friday, it can be noticed that the rates we are seeing today definitely benefitted, although initially, from the drop that occurred in equities, as well as emerging market currencies.
The rates also moved inconsistently towards better levels following the announcement made by Fed. It also leads to a further reduction in the amount of the Treasuries and Securities backed by mortgage which are being bought by $10 billion every month.
Lower mortgage rates can cause contradiction right now, because till now the trend has been such that as the pace at which bonds are bought has reduced, it has lead to higher rates. However, taking into account today’s scenario, it can be rightly concluded that it is the mortgage rates which have been in a mutually beneficial situation today.