Mortgage Rates Inching to the Better Side

Mortgage rates are inching to the better side of favorable to the consumer, but the rate itself is not changing – only the fees.  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.

 

Another session with very little movement in the bond and mortgage markets. The stock market though does not know what a pullback might look like - money continues to flow into US equities the only game in town (globally). The 10yr is at 2.32% as it remains glued to the very narrow range, now approaching the 18th day tomorrow---it has been since Oct 28th that the 10yr has ventured out of 2.38% to 2.30%.

 

Since we have little to talk about in the bond and stock market, let’s talk weather. 50% of the US has snow on the ground and temps are well below normal (Indianapolis 25 degrees below norms). It’s the earliest that the halfway mark has been passed since the current method for measuring began 2008, an event that usually doesn’t happen until December. Predictions from Accuweather are for more cold. Todd Crawford, a meteorologist at Weather Services International in Andover, Massachusetts, says snow cover reflects a lot of sunlight back into space. “So instead of the solar radiation being used to heat the ground and lower atmosphere, the energy is basically wasted, resulting in a cooler atmosphere from a global perspective.”

 

Why do we care, other than freezing our butts off? Because if the cold weather persists with these temps and more snow, it won’t be long before we hear the cacophony about weaker consumer spending at stores and how much more consumers are buying on the internet. The markets are always talking about the impact of weather on the economy. Recall Q1 when GDP dropped 4.6%, it was completely blamed on weather. And while I am at it, what has become of Black Friday?

 

Black Friday is no more! Once a big deal for shoppers the day after Thanksgiving, now the old Black Friday has morphed into just another shopping day. The Black Friday sales have already gotten underway. I think it started on Labor Day but not really sure. And what do you think about retail stores opening on Thanksgiving? Wouldn’t it be nice to keep stores closed and let employees enjoy a day off while we watch football and eat pumpkin pie (with whipped cream piled high), with turkey sandwiches for a late night snack? Could well be we will start Black Friday in 2015 on the 4th of July. Can’t wait to hear why shopping centers don’t see traffic and that consumers would have spent more but weather interfered, the reason Q4 didn’t meet forecasts.

 

In summary, it appears the bond markets are looking for direction. Both yesterday and today, morning strength gave way to mid-day weakness. Nothing dramatic in either direction, just sideways trading. I am continuing with my advice of locking once within 15 days of funding. All other loans will be floating.

 

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.