Mortgage Rates and the Economy

Mortgage Rates moved lower today preserving the amount of recovery that formed on the heels of last week's Job’s Report.   We were very close looking at increasing the rate up to 4.625%, but as it stands now with the market shift today, the most prevalently quoted conforming 30yr fixed rate for ideal scenarios is still 4.5%. 

Freddie Mac came out today and stated that the recovery still has a ways to go in their January edition of Economic and Housing Outlook.  There are four key indicators are needed to be positive for the economy and housing markets to be functionally normally.  These are a healthy jobs market report (low and stable unemployment), the mortgage delinquencies back near historical averages, home prices that are associated with affordable mortgage payments, and home sales in line with historical averages.

Even though we have seen some data about the economy be positive, there is still a lot of speculation on where the market is truly going.  As the report stated, we may be still two years away from a full recovery.

The roller coaster continues.  However, if you are more willing to take risk, today makes for a nice set-up with respect to a strategy that some risk-takers take  –  “Can it go lower?”   Chances that this happening is slim compared to the possibility of the rates moving up.  Look at it like the gas prices out there.  One day we see the price jump up traumatically, and take its time to move downward. 

Mortgage rates are acting in similar fashion.  In my opinion, locking is still the prudent move if you are closing in the next 30 days.  If you have any questions, please give me a call at 314-744-7806, or visit my website at www.CallTheMoneyMan.com.