Mortgage Rates Steady to Slightly Lower

Mortgage Rates were flat to slightly lower today.  Activity continued to ramp up following the holidays in the financial markets most directly connected to lenders' rate sheets, but that process will begin in earnest in the latter half of the week.  The increasing levels of activity mean more potential movement in rates, which have been very close to unchanged throughout the holidays.  4.625% remains the most prevalently quoted rate for ideal, conforming 30yr Fixed loans.

Among the significant events for mortgage rates later this week, three stand out.  Two of those are on Wednesday: ADP Employment and the Minutes from the most recent FOMC meeting.  While ADP isn't the biggest employment report of the week, it does serve as an early indication for Friday's official numbers.  Because it is released at 8:15am, it can have a noticeable effect on the very first rate sheets of the day.  This means that borrowers who wish to avoid the risk that strong employment data will push rates higher should lock on Tuesday or before.

That said, if the employment data doesn't happen to come in stronger than expected, rates could continue gaining some ground.  The long term trend still clearly favors higher rates, but even in such trends, there will still be pockets of correction and recovery.  These are great opportunities to lock.  The conservative approach would be to consider the moderate improvements since Dec 26 as a small pocket of recovery while the aggressive play is to hold out for better gains after the jobs data.  As always, this is tantamount to rolling the dice, as strong numbers could just as easily push rates higher before you'd have a chance to lock.

In summary, if you floated over the weekend, you may have seen better pricing today.  Lots of potentially high impacting events and reports coming in the next few days which makes floating risky but nothing of importance tomorrow. As the week progresses, floating will get riskier and riskier. It might be worthwhile to float overnight and see what the morning brings. 

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