Mortgage rates tend to be updated only once a day. Lenders set rates based on trading levels in mortgage-backed securities (MBS), which are essentially bonds that are linked to cash flows from pools of mortgage loans. MBS moves throughout the day just like US Treasuries. If they move enough, lenders can issue mid-day changes to the rates they published earlier in the day.

Today started with Treasury yields in higher territory and MBS in weaker territory. That almost always means mortgage rates will come out higher than the day before, and indeed they did! The average lender rose to 7.08% from 7.00% in a 30-year fixed scenario.

The bonds improved enough in the afternoon for lenders to reprice. That brought the average down to 7.03%, which is obviously still a bit higher than yesterday’s 7.00%. In conclusion, today’s rates hit another multi-month high.

Expect the potential for volatility to remain high through the second half of next week at least, with each day between now and then risking a fairly substantial move. The riskiest days are this Friday, next Wednesday, and next Thursday because of the jobs report, the election, and the Fed announcement.