Mortgage Rates Held Their Ground Today

Mortgage rates held their ground for the most part today.  Friday we saw a small bounce back toward higher rates, with the risk that we would turned a corner. Refreshingly though, markets held their ground fairly well today, and many lenders are unchanged from Friday's latest levels. On average, rates are only modestly higher.The most prevalently-quoted conforming 30yr fixed rate for flawless scenarios remains at 4.25%, but 4.125% is still be courted with additional fees.

Nothing of substance really came from Iraq or Ukraine today.  As long as traders do not find a reason to buy treasuries as a trade and large investors are cooling in their fears, the rate markets in the US will go back to normal fundamentals on inflation and economic developments.  There is no inflation creep, even though at times we hear a Fed official or two voicing concerns.  Best to worry out loud and cover your bottom if the worst case scenario were to light up unexpectedly. The economic headlines take center stage when global conditions fade for a day or so. The debate continues about the actual condition of the economy. Yellen and a few other Fed officials are unrelenting about the lack of quality of job growth, while others put their blinders on and remain totally focused on the headlines and less on the kind of jobs being generated. Meanwhile the stock market churns but technically bearish. The fundamentals about the economy take a back seat these days to earnings; how much profit companies are generating regardless of the longer term outlook over jobs and the ability of many consumers to pay basic bills and buy the necessities of life. Have you been to the grocery store recently?  

The stock market tried to improve today, in the final hour the DJIA backed away to about unchanged while the NASDAQ saw nice buying. The 10yr note yield increased to 2.42% while the 30yr MBS prices were fractionally weaker than the open this morning.  Treasuries still bullish, but at these levels unless there is the fear factor in play rates will struggle to decline much.

In summary, given the lack of strong follow through to better mortgage pricing from here it seems the risk of a move higher in rates outweighs the potential for lower rates. This is especially the case with apparent improvement in economic data that may show signs of momentum. That being said, geopolitical risks remain, and we've been fooled more than a few times with what seems to be better data so my recommendation remains the same. Short term closings should lock and longer term closings must go by your risk tolerance.

Remember, if you want to know the benefits of locking your rate today versus floating, simply give me a call at 314-744-7806 or visit me on my website at www.CallTheMoneyMan.com. I have access to real time Wall St. data and instant market alerts with breaking news that I monitor throughout the day to assist us on making the informed decision.