Mortgage rates finally ended this week’s winning streak today. In light of the general upward trend in rates over the past month, bond yields (which tend to correlate with mortgage rate movement) made it to surprisingly low levels as of yesterday afternoon. Mortgage lenders responded by dropping rates to the best levels in nearly 2 weeks.
Things changed today as bonds lost ground after the European Central Bank noted a still-decent outlook for the economy recovery and an earlier-than-expected outlook for ending its bond purchase program. In general, a stronger economy hurts bonds and central bank purchases help.
Then in the afternoon, a scheduled auction of 7yr US Treasuries was met with less enthusiastic demand compared to recent auctions. The day