Mortgage Rates Changed in a Hurry Today

Mortgage rates were higher today, ending nearly a week and a half of modest improvements. While no individual day stood out during that time, the combined effect took rates extremely close to their lowest levels of the year. Had today moved in a more friendly direction, we would have hit the low point - instead, we remain in the same narrow range that has characterized the past four-six months. The most prevalently-quoted conforming 30yr fixed rate for top tier scenarios remains at 4.125%, with the closing costs associated with this being the only change. 

Better economic news continues to unfold - this morning the August ISM manufacturing index was better than was thought in July.  July construction spending was also up twice as what was expected.   The bond and mortgage markets were hit by the stronger data with the 10yr note now trading above its 20 day moving average since the end of July.

Nothing of consequence today in the geo-politics sphere.  Same stuff, Ukraine and Russia still on a stare down with Putin acting as if he doesn’t care one bit about any additional sanctions that Europe may impose. The US continues to talk but has very little leverage in this situation; Putin has no respect for President Obama and in Europe any sanctions levied will likely hurt Europe as much, even more than Russia. As we mentioned a few times as long as Putin has the overwhelming support of Russians, he has little to be concerned with.

Getting rather annoying, at least to me, to constantly be exposed to the drum beat of opinions on when the Fed will increase interest rates. There is no one, including me, who has any real solid opinion on when the Fed will begin to tighten, with each data point the views change, yet the media cannot get enough of the opinions.  The increase in rates in the treasury markets today should not be ignored.   The move was huge. It took the 10yr seven trading sessions to decline to 2.30%, it took seven hours for the rate to bounce back. Volatility in both stocks and bonds is about to increase after rather subdued trading through most of August.

In summary, mortgage bonds are giving up some gains today as better than anticipated economic data was released this morning. We have a lot more market moving data this week which will make for very volatile sessions. Risk vs Reward now favors locking.

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.