Mortgage rates moved sharply higher today on a combination of factors including strong economic data, developments in Ukraine, and prevailing market momentum.  That momentum risked turning negative as soon as Monday, when rates ended their impressive 7-day rally.  Rather than simply turn around and head the other direction, however, rates managed to hold mostly sideways until today.

Part of the resilience had to do with Geopolitical risk swelling earlier in the week.  As we noted on Tuesday, such strength only lasts as long as the risk stays elevated.

"When it comes to bond market rallies that draw strength from geopolitical risk, the 'catch' is that they rely on that risk staying elevated if the gains are to persist. That means the longer Ukraine goes without breaking out into civil war, the harder it will be for rates to maintain this morning's gains without being acted upon by another beneficial force such as lackluster economic data. In other words, today's improvements present a good opportunity to lock."

As such, today's sharpest move in bond markets (which include the mortgage-backed-securities that dictate lenders' rates) came after Ukraine headlines suggesting solid steps toward deescalation of military involvement.  Momentum was already slipping into negative territory after stronger economic data this morning.  When economic reports are better than expected, bond markets tend to weaken, which pushes rates higher, all things being equal.

The net effect was a move back to 4.5% for most lenders as the most prevalently quoted conforming 30yr fixed rate for best-case scenarios (best-execution).  It had been 4.375% yesterday, and some lenders may still be competitively priced at that rate. When adjusted for day-to-day changes in closing costs, today's rates are 0.06% higher.