Mortgage rates moved only slightly lower today, but it was enough to bring the end-of-day average to the lowest in more than a year an a half.  For the record, there were lower rates available on the morning of October 15th, but markets moved so much during the day that the last rate sheets of the day weren’t quite as strong as today’s.  Similar rates were also seen at the end of the day on December 1st.

Today’s strength is most readily seen as a factor of weakness elsewhere–namely oil and stocks.  It’s not that either of these has a reliable, direct connection to rates, but generally speaking, when stocks are selling as much as they were today, bond markets tend to pick up some of that money.  When bond markets improve, prices move higher and yields (or “rates”) move lower.

The only caveat is that the process takes a bit longer to play out for mortgages, and doesn’t generally happen on the same scale as a more mainstream bond market component like US Treasuries.  Because of this, mortgage rates spent much of the day flat–even slightly worse than yesterday.  Mid-day improvements in the broader bond market were finally big enough for lenders to revise rate sheets lower, further solidifying 3.875% as the most prevalently-quoted top tier conforming 30yr fixed rate.  4.0% remains not far behind.