Mortgage Rates Continues to Drift Higher

Mortgage rates continues to drift higher, even though the actual rate did not change much, the fees associated with the rates were the only thing that was hurting.  The most prevalently quoted conforming 30yr fixed rates for top tier borrowers was still at 3.875% with no fees. 

The stock market did rebound in the last two days to regain the losses since the beginning of the year.  Our forecast of a high volatility is still very much intact and I do expect high volatility during the first quarter of the year.  Treasuries did test the lows in October, but did not break through.

With the news that FHA will lower the annual MIP premium by 0.5%, fears of lower quality mortgages with less down payments is running rampant. There should not be any fears as credit requirements are not being lessened, just the amount of down payment needed.

Jobs. Jobs. Jobs.  This is the news everyone waits for at the beginning of the month and where most traders hedge themselves one way or another.  I can never figure which way the market will go as this day has proven me wrong more so than I want to count.  Hence, even after my complete analysis, it still is anybody’s guess.

In summary, we lost a little more ground today, as we are seeing all the gains we got from the beginning of last week go away.   Tomorrow brings us the most important data piece for rates this month - however it may not matter as shown in the last two reports.  The focus is continuing to look into Europe’s issues and Oil.  Locking is still the smart move, and if you did not do such today, I would wait for my commentary in the morning.  I will state however, conversation this evening with colleagues believe that rates might see another downturn again.  Let’s hope they are right. 

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.