Mortgage rates made substantial gains yesterday as financial markets underwent a classic flight to safety. This involves selling riskier assets like stocks and buying fixed-income assets like bonds. When investors buy bonds, it puts downward pressure on interest rates, all other things being equal.
The flight-to-safety began with the 2nd biggest bank failure in history late last week. It's continuation made sense in light of the 3rd biggest bank failure over the weekend. Monday came and went without the 4th or 5th biggest bank failures in history, so panic began to wane halfway through the day.
It's been more of the same on Tuesday and this brings the average lenders back in line with Friday's levels for conventional, conforming 30yr fixed rates. That's still much lower than Thursday, but there's a risk of additional increases if the panic continues to subside.