Mortgage rates didn't move much today, depending on the lender. Most of the movement seen was toward slightly higher levels. The bond markets that underly mortgage rates remain under pressure after last week's Fed Minutes showed widespread support for a Fed rate hike in June or July. Since then, several Fed speakers have echoed the sentiment in no unspecific terms.
The Fed Funds Rate does not directly dictate mortgage rates, even though the two tend to move in the same direction over time. The Fed only adjusts its rate at scheduled Fed meetings 8 times a year (and very rarely at unscheduled meetings). Mortgage rates, on the other hand, can move every day and sometimes multiple times per day. So they have a chance to react to changing market sentiment in real time. That's the driving force behind last week's move toward higher rates and the reason we remain at those same rates today.
We've now spent a full week with the most prevalent conventional 30yr fixed rate quote at 3.75% on top tier scenarios. Before last week's Fed Minutes, it had been 3.625%.
