Mortgage Rates Bounced Back A Little Bit

Mortgage rates bounced back a little bit today, erasing some of the losses we had on Wednesday, but nothing compared to what we lost on Tuesday.  The most prevalently quoted conforming 30yr fixed rates for top tier borrowers  was at 4.00%, but some folks still wanted the lower rate and opted for 3.875% with extra fees. 

Generally markets were quiet today but the stock indexes keep on climbing. The 10yr settled up at 2.26% after climbing to 2.30% earlier in the day, and 30yr MBS price were again positive for the day. Trading volume was on the thin side with many taking the day off.  News of interest, Japan’s inflation rate declined once more even with large support from the government and the BofJ. Japan following Europe on declining inflation levels momentarily resurrects the serious situation in global economies that continue to experience declining prices. In the US the Fed is growing more concerned that inflation isn’t increasing as the Fed has wanted now for the last three years.

Hard to hear a discouraging word for US equities these days (and the sky is not cloudy all day) with key indexes making new all-time highs almost daily.  The US stock market is about the only bourse in the world where investors believe the best returns are available. The US is holding the world together. US interest rates also favored by global investors with our rates higher than other “safe” bond markets. One of the key drivers these days is the decline in oil prices, keeping inflation low and adding to increased consumer spending. How low will the price go? Depends on demand and how low the price goes before production is cut back.

Another short holiday week as we have New Years.  Markets are open except on Thursday and the bond market will close at 2:00 Wednesday afternoon. The data next week has some meat.  Nothing of substance on Monday, Tuesday December consumer confidence from the Conference Board, Wednesday weekly claims, December Chicago Purchasing mgrs. index, pending home sales from NAR. Friday Dec ISM manufacturing index, Nov construction spending. Kind of thin on data. Much of the focus will. Be on global markets and any news about consumer spending for the holidays. Once again markets should be thin with many in FL soaking up the sun.

In summary, as expected, today was a sedate day in rate markets.  There was no significant data, and negligible movement for MBS.  Next week may bring more of the same, as holiday period continues.  The good news for lenders and borrowers is that we're about .75% lower on treasury yields that a year ago, with similar drops for mortgage rates.  Floating always entails some risk, but we've been in a pretty narrow range for rates the past month, let's hope the long term trend lower continues.

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 my website at www.CallTheMoneyMan.com. I have access to real time Wall Street data and instant market alerts with breaking news that I monitor throughout the day to assist us on making the informed decision.