Mortgage Rates Near 3 Year Lows Ahead of Fed

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Mortgage rates dropped sharply lower today relative to the amount of movement in the underlying bond market with the average lender right in line with the lowest levels since late 2022. Because rates are directly tied to the prices of those bonds, the correlation tends to be almost perfect over time. [thirtyyearmortgagerates]
But there are always scattered examples of one leap-frogging the other. These inconsistencies can arise for several reasons. In today’s case, it happened due to late-day strength in bonds yesterday afternoon coupled with the structure of the underlying mortgage bond market.
An explanation of the latter would be woefully esoteric in the context of a daily mortgage rate update–even for industry professionals. In the simplest possible terms, it has to do with

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