Mortgage Rates Rose By More Than 1/2 Percent In 1 Day Wednesday

Mortgage rates made a historic change May 28 2009Conforming mortgage rates rose by 0.625 percent Wednesday.  Yes, you read it right.  Zero-point-six-two-five percent.

The surprise surge in pricing started shortly after 1:00 P.M. ET, then continued all the way until the market’s closing.  It was the sharpest one-day surge in mortgage rates in recent history. Perhaps ever.

For mortgage rate shoppers swept up in the surge, monthly payments are now higher by $29 per $100,000 borrowed.

That’s a significant shift.

For as rare as Wednesday’s events were, though, middle-of-the-day, 0.625 percent rate changes don’t just happen.  Yesterday, the action was the result of a confluence of factors, including:

In addition, momentum trading played a role. 

As markets worsened, selling begat more selling, amplifying Wall Street’s total losses.  As mortgage bond prices fell, mortgage rates went up.  By a lot.

Mortgage markets are notoriously fickle and yesterday’s events proved it.  Days like Wednesday are precisely why insiders recommend shopping for mortgage rates in a compressed timeframe.  The faster you finish, the lower the risk of losing low interest rates to new market conditions.