Mortgage Rates Coming Back to the Recent Lows

Mortgage rates moved quite a bit this morning before settling back upward, but still positive for the day.  It looks like we are moving back to our recent lows last month.  We are still seeing 4.25% as the most prevalent quoted conforming 30yr rate for top tier borrowers with additional closing costs and now 4.125% coming back into the picture. 

Technicals are slightly bullish now after breaking 2.52% today. The 10yr is now trading under the 20, 40 and 100 day averages and the momentum oscillators have turned slightly bullish. We still worry over 2.45%, a key chart resistance/support level that has been key since early June. For rates to continue lower it will likely take increased geo-political fears and/or a weaker than expected Sept employment report on Friday. Equity markets remain a driver for rate markets also, but the bulls still have a grip on the key indexes. With little else out there to generate income buying stocks is still in vogue. Regardless of the soft economy investors can’t bring themselves to simply park money in safe trades even with no gains recently---yet.

In summary, as long as we remain under 2.5% yield on the 10yr treasury, I'm suggesting floating....for now. With a yield under that level, we've just reentered the long term downward trend channel. We'll need to see a few days worth of confirmation for me to be confident rates will continue lower, because this could just be a test and rates move right back up. Float cautiously, and as always, be ready to lock.

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.