Mortgage Rates Holding Near 20 Month Lows

After the strong rally yesterday the bond and mortgage markets backed up a little today however the selling was moderate in comparison to the strength seen yesterday. Two weeks ago the 10yr yield hit 1.70% before jumping to 1.94%, yesterday the 10yr back to 1.72% presenting a technical double bottom at the recent low yields.  I continue to be bullish about the outlook for US interest rates but the immediate term may push rates slightly higher pending economic data and unfolding conditions in Europe, China and Japan. Global economies are declining and the US economy, regardless of the platitudes from the FOMC, still has hurdles to overcome in terms of jobs and the inability of inflation increasing. Some of today’s selling due to Greek stock market rallying, but it is more technical than fundamental.

A big day tomorrow with the first look at Q4 GDP, Q4 employment cost index, the Jan Chicago purchasing managers index, and U. of Michigan consumer sentiment index. Each data point has the potential of moving markets, but the elephant is the GDP read.  There could be some risk in floating but I am assuming most are doing it as it has been quiet with my clients wanting to lock.  I just hate to say it, but “Pigs Get Fat and Hogs Get Slaughtered”.  Rates are very attractive and yes, I have said that they may go down, but with so much volatility, can you afford the risk if they go up?  I just hope this roller coaster does not become what is happening as of late with gas prices.

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.