Mortgage Rates Held Steady - Another Fork In The Road Still Ahead

Mortgage Rates held steady today even though the Mortgage Backed Securities (MBS) did move in a positive direction to have the rates make the downward turn.  After a weak job report this morning, and with minor revisions for the previous month’s numbers, the drop was not as great as one would anticipate as this report is usually a market mover.  Overall, the gains today did not put a big dent into the drop we saw over the week.   The most prevalently quoted conforming 30yr fixed rate for the very best borrower scenarios remains at 4.375% for the most part though 4.25% and 4.5% are both fairly close.

Since the middle of December, rates have been moving lower – and there was some justification to the reason why they were doing such.  As this continued into this month, there was speculation if this market-based correction had run its course - or was there any potential that the rates might just move lower as the floor was shifting downward.

Any time rates are approaching these forks in the road ahead of a report like the Employment Situation, we can conclude some indecision on the part of financial markets as well as the hope that the important report will provide guidance. Unfortunately, what has happened today has frustrated a number of us as we scratch ahead with business.

Yes – the numbers were weaker!  Yes - this did help rates improve a bit today!  But the little bit of movement did not do anything to clear up the market’s direction, in fact it added more confusion.  Mortgage rates had come to this fork, and the jobs report did not clearly indicate which path it should turn towards. When this happens, we move on to the next major economic news for direction.  More than likely, it may rest on  Janet Yellen's first congressional testimony next week.  At this time, one could cautiously float and hope for a stronger response to the jobs data in the days ahead – but as it stands now, even though the fork is behind us and we may have made a turn, I would not at all speed up as it could have been the wrong turn. 

In summary, yesterday I said lock, and while there has been a small "token" of improvement, I think that was and still is the best piece of advice. We appear to be at the low end of the current range and we'll need significant data or equity market sells off to further our cause. As is sometimes the case, we could see the rates go back up with no reason whatsoever (sounds like gas prices).  I still recommend locking at application moving forward as it feels it will take something very big to push lower lows in rates and we are already at or near the lowest rates seen in months.

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