Mortgage Rates Continue to Bide Their Time

Mortgage rates continue to bide their time as they have been sideways upward for the past few days to open the week.   Overall, rates were slightly weaker, resulting in a better balance between 3.875% and 4.0% as the two most prevalently quoted conforming 30yr fixed rates for top tier borrowers – with fees associated more so with the lower rate.

 

A big day for the NASDAQ and the stock market in general; the bond and mortgage markets held quite well given the strong equity market today. The market got a boost this morning with Sept existing home sales better than estimates. Up 2.4% against 1.0% expected to 5.17 mil units. Yr/yr sales up 1.7%, the median sales price $209.500.00. There are 2.3 mil homes for sale that is a 5.3% supply based on present sales pace and up 6.0% from last year. 29% of the sales were 1st time buyers, still a very weak percentage. We will see new home sales on Friday, expectations are not so good; expected down 8.3% to 460K units (annualized).

 

The overall bond market was reasonably quiet today, the 10yr yield did increase 4 bps, mortgage prices opened weak -13 bps at 8:30 but at 4:00 about unchanged on the session. A little perspective; the DJIA is now where it closed a week ago last Friday. Last week was quite volatile but when the dust settled last week the DJIA was off just 164 points. We continue to expect the equity market is going to work lower. There has been no changes to the global economic outlooks; China and Europe continue to struggle. The US has very little consumer spending going for it and the housing sector remains very soft. The improvement in the stock market since last Wednesday should not be seen as a buying opportunity, more a selling opportunity.

 

The plus for the economy now is mortgage rates declining.  More economist believe rates will move lower. The small investor has not been sucked into equity markets much, with low mortgage rates the housing sector is likely to improve as long as rates remain low. When rates increased this summer, the increase wasn’t much but housing slowed. More credit and less Dodd/Frank will go a long way to right the ship and the economy. It has been 6 years since the housing market crash, still bureaucrats are living in the past. Once in 60 years the housing market blew up and the blame rests with Wall Street and unscrupulous mortgage lenders that took advantage of the situation.

 

In summary, another Ho Hum day in the markets today with very little going on. Floating remains viable for the near term until something changes to influence decision making. Still, if you're closing in 15 days or less and you like the pricing you have now there is no sense in waiting any longer to lock in. For longer term closings it may make sense now to try and float until you gain in pricing from a shorter lock period, however, keep tuned in to the markets daily for any changes.

 

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.