Mortgage Rates Got A Little Better Today

Mortgage rates got a little bit better today with no reason that usually allows an explanation to do such.   Considering that yesterday's higher rates were contrary to the underlying market movement, today can be viewed as more of a correction to previous volatility, with no profound comment on future momentum. Whereas the most prevalently quoted conforming 30yr rate for top-tier scenarios had been closing in on 4.625%, today's strength keeps 4.5% firmly intact for now.

The 10yr once again has tested and held the key 2.80% level.  As long as it holds there remains a very slight positive bias.  Interest rates are going to increase, there is little doubt, again as I mentioned this morning, it is only a matter when?  So far with all the bearish chatter and bearish comments from the FOMC and Janet Yellen, the US bond market has not moved out of its two month range. The balancing is likely driven by continuing safety moves into treasuries over the Russia issues.  No new buying but those trades that were put in place against the potential of the stock market declining (it has not) and geo-political factors by enlarge remain in place.

Unlike much of 2013, the current communications coming from the Fed leave far less to markets' collective imagination.  Back then, we could only guess as to when "enough would be enough" with respect to economic improvement justifying the start of tapering - the regularly scheduled reduction in the amount of bonds bought by the Fed.

As we stand now, we now see the best chance in a long time to get back to basics when it comes to the economy and rates. The next two weeks offer lots of economic data to help assess that possibility. Without regard to the data, rates are nearer there recent highs, and aggressive floaters who understand the risk of loss can use the recent highs as a 'stop-loss,' meaning they'd lock at a loss if rates were to rise back above yesterday's levels. Otherwise, we don't have much incentive for floating or locking until March economic data starts coming into focus (but expect locking to be a better idea if the data begins the strengthen--thus confirming much of the slowdown of the past two months to be at least somewhat weather-related).

In summary, after the large sell off on Wednesday, we appear to have stabilized at these levels. It also happens to coincide with the high end of the recent range which may mean floaters are to be rewarded.

Keep a strong look at the markets and continue to cautiously float if you do want to take a risk. 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 me on my website at www.CallTheMoneyMan.com. I have access to real time Wall St. data and instant market alerts with breaking news that I monitor throughout the day to assist us on making the informed decision.