Mortgage Rates Sees More Volatility

Mortgage rates moved lower right after the unexpected jobs report.  However, as the day progressed, everything that pushed the rates lower in the morning was given back in the afternoon due to the increase volatility in the market.  Borrowers who were quoted the same rates today as yesterday (4.125%) for top tier borrowers, again with the only change coming in the form of closing costs.

At the end of the day the 10yr is not holding its extremely important technical resistance level.   I know we have hammered on it recently but it is one of the clearest technical readings we have seen in months in terms of expectations. As long as it holds, regardless of the reason, the outlook is still positive, maybe not quite as much with Ukraine settling for the moment but nevertheless if the 10yr closes above 2.45% (which it was at 4:00) you can look for interest rates to increase to 2.57% on the 10yr and MBS rates to increase about 10 basis points in rate.

Today was volatile, as we have noted we expect volatility to increase and it has in the last week on a day to day basis. The employment report today didn’t settle anything, it was so off that the majority now believes when the Sept report is released a month from now the data will be revised higher.

In summary, you would think after the big miss on NFP that rates would move dramatically lower, but it appears investors are ignoring the data. Historically, August payrolls are revised higher on average by about 100,000 which seems to justify ignoring the miss. If you floated into today's data, I would continue to float over the weekend. The trend over the last couple months has been rates move higher at the beginning of the month then trend lower towards the end of the month. 

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.