Weekly Mortgage Rates

April 8,2025

There are decades where nothing happens; and there are weeks where decades happen – Lenin

(Ed Bradford, bond trader shared this quote on X)

We are witnessing historic change in real time, at lightning speed. One analyst called it- a global game of chicken. It’s still unclear the path ahead, which freezes investors and consumers. We hope for more clarity soon.

The tariffs announced were more aggressive than the market expected.  After the announced tariffs, mortgage rates benefited from the move lower in stocks as some of that money goes to the ‘safe haven’ of bonds. But there is a limit to the appetite for bonds too, as we found out quickly.

The sky was yellow, and the sun was blue- The Grateful Dead

The volatility in the bond market last week was substantial. For perspective, Friday morning we had the best rates of the year. Then on Monday we lost all those gains from last week and then some.

Volatility makes clients afraid to decide and keeps them from locking in a rate in anticipation of even lower rates. Adding to the stress in decision making, when the bond market is unsteady lenders are also slower to pass on any momentary improvement in rates to customers in case it reverses quickly. 

So those waiting for even lower rates are disappointed, at least for now. No one can say for certain the path for rates ahead, we wouldn’t attempt it.   

The 10 year don’t lie

We call the 10-year treasury the bellwether for all longer-term bonds and what it’s telling us now is that despite the rout in stocks and after the initial panic moves subsided, the bond market returned to reality and started pricing in for stagflation- inflation with slow growth. This shows that there is still a limited appetite for lower returns on bonds. The view must change to see sustainable improvements in rates.

The bond market is moving somewhat independently of other financial indicators as shown by the move higher in rates all while stocks continued to sell off. We also saw this last year too when the Fed lowered the Fed rate and long-term rates moved higher.  

Oh yeah, jobs

We almost forgot about the usually very important job numbers for March that were released Friday. Stunningly, we added 228K jobs for the month, much higher than expected. The unemployment rate ticked up to 4.2%.

Zero impact from the jobs numbers though as that report was from before everything changed.  Bond traders are looking ahead to what future employment looks like, not the past. 

What’s ahead

Your guess is as good as mine :) As of the writing of this update, stocks were doing better on rising hopes of trade deals but bonds just treading water for now.

CPI inflation readings will be out later this week for March. It will also likely get little weight in markets since the report is also from the Pre-April 2^nd world.

Probably ahead are more wild swings driven by headlines and we are on the lookout for the ripple effects as global alliances shift. Increased defense spending has been announced from several countries in recent weeks, and this morning from the US a trillion-dollar defense budget floated. (higher spending = more deficits) We have some bond auctions this week, we will be watching foreign investors appetite to buy our debt as a possible indicator of a changing global sentiment for US bonds.

There will be more volatility ahead and clients should take advantage of any dip in rates as it might not be sustainable in the near term. If the opportunity comes up, strike while the irons hot.