Mortgage Rates Were Mixed Today

Mortgage rates were mixed today depending on the time of day you look. Most recently, the average lender is back to unchanged vs yesterday. Before that, most lenders were in slightly better shape, but market weakness prompted widespread panic to lower the rates.  4.25% remains the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios. Any changes in quotes from yesterday would only affect the closing costs, and even then, they'd be minimal.

Observing trading the last few days, it is going to take a real shock to push interest rates lower from the present levels.  2.44% for the 10yr note rate is a rock-solid technical and psychological level that won’t break down unless Ukraine turmoil begins to involve other nations, or the separatists overrun Kiev. Neither of those are very likely at the moment. The 10yr  fell to 2.45% this morning on reports that the separatists downed two Ukrainian jet fighters, it fell no further and is sitting at 2.47% at 3:00.

Who gives a damn whether the economy is growing or weakening?  As long as interest rates stay low, who cares, because people always chase more income, more profit. The S&P made a new high today.  Today the IMF lowered its forecast again from +2.0% in June to +1.7% in the recent release.  In May the IMF was looking at growth at +2.3%. With the Fed lowering its growth rate at the last FOMC meeting when it released the quarterly data and now the IMF -  the Fed has increased latitude to keep those FF rates low, possibly a lot longer than the current general consensus of an increase in mid-2015. The IMF saying that the decline in Q1 growth (-2.9%) is why it has lowered the outlook - but doesn’t that also suggest Q2 and the rest of the year won’t meet the previous forecasts?

Rates have held between 4.125 and 4.375 for well over 2 months. It continues to be the case that next week's busy calendar of important economic events stands the best chance to break the monotony. Until that happens, both RISK & REWARD for locking or floating remain lower than normal. That said, if you choose to float, make sure to set a line in the sand somewhere at slightly higher rates where you'll cut your losses and lock if the market moves against you.

In summary, even though the bias has been to some improvement in pricing we've been hanging around these levels for awhile now. This hints at a lack of conviction by the markets to want to move lower perhaps looking for some stronger impetus and direction. That may come next week with the end of the month lead up to the all important Jobs Report on Friday, August 1st. I would be inclined to lock if I was within 15 days of closing to protect against a bounce higher. For longer lock periods, check your tolerance for risk.