Mortgage Rates Roughly in Same Territory as Last Week

Mortgage rates began the day in roughly the same territory as Friday afternoon. The most prevalently quoted conforming 30yr fixed rate for best-case scenarios has pushed itself back up to 4.25%. If you can still get 4.125%, it would mean higher fees to get such a rate.

Mortgage Bonds drifted lower during today's quiet trading session in the absence of any major headlines or economic reports. The 4% coupon was hovering near the October resistance highs, but closed below those levels.   Stocks also had a quiet trading session with little to move the markets. There are no economic reports due for release tomorrow.

This week is slow in terms of events that might have a big impact on mortgage rates. Things begin to pick up a bit on Wednesday afternoon as the Fed releases the Minutes from its most recent policy meeting. Mortgage rates are most directly affected by the trading of Mortgage Backed Securities (MBS), which are in turn, closely linked with trading in US Treasuries and other fixed income securities.   Fixed-income or 'bond markets' are in a state of flux at the moment. The broad-based consensus that rates would move higher earlier in the year has evolved into a grudging acceptance (among traders, who are losing money as part of the process) that rates needed to move lower and could perhaps move lower still.

Right now we have seen a new floor for interest rates and either we may have gotten here to fast, or there was reason for the rates to get her in the first place.  Either way, we have hit a lull which means either we continue to push further downward, or bounce back up.   It's far from conclusive (in that rates have not moved quickly higher by any means, but worth keeping in mind when deciding your personal lock/float strategy.

In summary, rate markets continued treading water today, with a stronger morning and weaker afternoon. There's not much economic data to influence markets this week, so floating borrowers may have time on their side.  Floating always entails some risk, but for now, borrowers who are closing in over 30 days, may want to carefully wait.