11/22/2013 - Last Week's Mortgage Rate Recap and This Week's Forecast

Last Week's Mortgage Rate Recap

Mortgage Rates Currently Trending: NEUTRAL

Last week saw rates improve early in the week on Monday and Tuesday, but worsen by an average of .125% towards the end of the week as Tuesday and Wednesday the MBS (Mortgage Backed Securities) Market sold off. By Friday we had recovered a bit, so that we were only down 20 basis points on the entire week and we had mostly stabilized in mortgage rates. However we had a high of 101.96 for the week and a low of 100.84, a swing of over 100 basis points, which led to some interest rate volatility throughout the week. Thursday and Friday had MBS bouncing off of the support level at 100.86, and interest rates were neutral but rebate pricing (the credit a lender gives you towards your closing costs) had improved.

 

 

This Week's Mortgage Rate Forecast

Mortgage Rates Forecast: NEUTRAL, but with some volatility

This week as we get closer to Thanksgiving, trading volume will drop and will exacerbate trading movements, leading to increased volatility. Also on Wednesday when the Durable Goods Orders data is released we should expect volatility. Our downside for the week is fairly limited since many traders will park funds in bonds as a safe haven to avoid any volatility while they are off for the holiday, but we could still see large spikes and dips.

BOTTOM LINE: You should talk to your Mortgage Loan Professional this week to weigh the possible benefits of floating your interest rate or locking in, based on your unique scenario. If you have time before you are closing a loan, don't let the volatility this week scare you as we will likely end the week within the very tight trading range that we find ourselves in, meaning mortgage rates won't really move one way or the other as part of a larger trend.

 

 

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