Mortgage Rates Playing The Range

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Posted To: Mortgage Rate Watch

In addition to writing about mortgage rates , I also follow and analyze the underlying bond markets. Early on in that endeavor, one of my favorite phrases was “play the range before the range plays you.” This was every bit as simple as it sounds. Like mortgage rates, financial market metrics tend to get stuck in a range from time to time. Frequent bounces around the same ceilings and floors let us know a range is taking shape. From that point on, the highest probability bet is to assume the floor and ceiling will remain intact until one is clearly broken. That might sound overly simplistic. But the point isn’t to call attention to the obvious (after all, of course a ceiling isn’t a ceiling any more if it has been broken). Rather, the point is to not get caught up in rapid movement from one…(read more)

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