Mortgage Rates Still at a Standstill

Mortgage rates are still at a standstill, but for how long?  Last week we saw nothing but volatility were the rates went down, then up, then down, then …  well, you get the picture.  We are still out the lows in nearly two years, but all this can change tomorrow.  Today, the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios still stands again somewhere between 3.875% and 4.0% depending on various fees, and it is still pushing the higher side.  

As I mentioned, there was very little movement today – at least not much.  US stock indexes lower this afternoon but not much given the improvement yesterday. This week is as we suggested on Monday, is likely to be quiet ahead of the FOMC meeting next week. This morning Sept CPI was out, another report on inflation that isn’t what we want to see, yr/yr +1.7% and less than 2.0% the Fed is targeting. Deflation concerns are roiling Europe’s economies and in turn is pushing deflation fears to the forefront.

Next week we have the FOMC Meeting.  There is a lot of debate about whether the Fed will conclude QE3; a couple of Fed regional presidents think the Fed should hold off but we expect the FOMC will follow through with its stated plan to end it this month. In the meantime there isn’t much that will move rate markets other than the unknown that could crop up. The Ottawa shootings today do increase the thought that terrorists are now targeting politicians around the world. Not sure why but at least based on the news reports there isn’t more deep concern about what is occurring in the mid-east with the expansion of tribal warfare. The region is degenerating into more and more civil wars; it doesn’t appear that the US or any coalition can have much effect on how it continues to unfold---and possibly spread globally. If we want something to fear it’s the militant Muslims that are increasingly gaining power and territory. Upsetting the Middle East isn’t something that should be seen as a regional issue.

In summary, rates continue to trade sideways. Any sell off is met with buyers and any rally is met with sellers. The rates market continues to look for direction - however, the overall trend still favors lower rates to come. I continue to favor floating loans unless you are closing within the next few weeks.

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.