Mortgage Rates Came Back Today

Mortgage rates came back today following weaker economic news in Europe today.  The most prevalently quoted conforming 30yr fixed rates for top tier borrowers was still at 4.125%, but 4.0% was strongly in the picture today with lessor fees. 

Last night two reports, one from China and one from the EU that manufacturing and services in those regions is slowing down. The 10yr went to its resistance trading at 2.30% briefly in Europe trading. The soft data from global markets was trumped by US data this morning; October existing home sales were better than thought; the weekly claims a non-factor; and the Philly Fed business index made a huge gain (one that we don’t believe), the index jumped from 20.7 in October to 40.8.  October leading economic indicators also were stronger than forecasts, up 0.9%.   By the end of the day interest rates have not changed in any appreciable way now for 19 sessions. Early this morning on the open of the stock market the DJIA opened -74, like the bond market in reverse - nothing seems to worry investors and equity prices based on the indexes continue to move higher while the bond market can’t find anything to move rates lower. 

There is nothing to add about the rate markets in terms of what to expect.  As long as this almost unchanged interest rate market continues, and until it breaks free we suggest keeping flat, the risk in floating isn’t much however, as long as you are swift enough to avoid being whipped around, buying high and selling low.

In summary, mortgage bonds remain in a tight sideways pattern. Bonds are bound to break higher or lower in the coming trading days. Depending on which direction the break occurs we may be quickly locking or popping champagne corks as we enjoy a dip in rates. Float carefully for now but do keep a close eye on the ten year treasury yield for signs of the break.

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.