Mortgage Rates Jumped a Little Bit

Mortgage rates jumped a little bit today.  After the last two wild and crazy days, we have seen the markets go from one extreme to another – but as it was yesterday, we are seeing rates near the bottom as they were back in June of 2013.  The most prevalently-quoted conforming 30yr fixed rate for top tier scenarios now stands again somewhere between 3.875% and 4.0% depending on various fees -   even though earlier today there was anticipation that 3.75% was coming into play.   

We believe the rate market finally lost all of the bears in the route yesterday, capitulation is the word. There is going to a lot of interday and intraday volatility now in the interest rate markets. This morning a prime example when I came out with my morning update telling everyone to use caution – but right after that, MBS went down very quickly and I was suggesting to lock any business that we had in front of us unless we were talking more than 30 days to close.  The 10yr went from an open of 2.04% to a close of 2.16%.  Still this is still a positive sign that we have broken through another resistance level, but are we heading back up again?

The best advice I have is still the same as I stated yesterday – do not make any swift moves. Let markets settle down over the next few sessions -  way too many opinions out there now, and very high level of emotions. Lenders that are selling mandatories are getting their skin peeled, a reason why MBS prices plunged so hard this morning - paring off trades again as they did yesterday.

In summary, while tempting to float, I really think that taking the best pricing in the last 16 months is a very smart decision.  This market has sure been volatile with large price swings happening within minutes. This may be the way things will remain for some time. In markets like this caution is always recommended but if you can stomach the volatility in the short term we could potentially see lower rates still to come.

Keep a strong look at the markets and continue to cautiously float if you do want to take a risk. 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.