Mortgage Rates Go Higher - Another Fork in the Road Ahead

Mortgage Rates did go higher today as financial markets took a break from recent volatility.  However, even with the Mortgage Back Securities (MBS) increase, 4.25% remains the most prevalently quoted conforming 30yr fixed rate for the very best borrower scenarios with 4.375% not far behind.   

Yesterday I talked about the correlation between rates and stocks does not always mirror each other, as has been the case on why interest rates were being driven lower because of the weakness in equities markets/stocks.  The nature of this relationship tends to move in phases and right now, we are still clearly in the opposite phase where weaker stocks benefit rates. 

So what did we see today – we saw the market bounce back and hence, mortgage rates followed in the same direction.  There was nothing from any economic news that determined this movement today, but that is not the case starting tomorrow morning with ADP announcing its own jobs report.  Today provided a good opportunity for markets to slow down and collect themselves before receiving the next potentially inspiring headlines.  During the next three days, there will be a number of reports leading to the much anticipated jobs report at 7:30AM CST.  Here again we are at the fork in the road as the roller coaster is going to run one way or another.  Have we seen the floor as yesterday did set the mark in the past 90 days?  If the data is more robust than predicted, we will see the rates jump.   

In summary, the next few days will set the direction for mortgage rates in the near term. If employment data is better, rates will rise, if worse, they will hold steady or fall. With the recent improvement in mortgage rates, I see no reason to float through the next few days. Risk outweighs reward.  My opinion is to make the safe call and go ahead and lock in your loan if you are closing in the next 30 days. 

If there are any questions you have in regards to financing, please give me a call at 314-744-7806, or visit my website at www.CallTheMoneyMan.com.