Mortgage Rates Have Little Movement Ahead of Fed Announcement

Mortgage rates have little movement ahead of the Fed Announcement tomorrow.  As such, the most prevalently quoted conforming 30yr fixed rate for top tier borrowers was still at 4.0%.  Some borrowers have opted to pay extra fees for the lower rates as it still makes sense in a few scenarios.

MBS prices did end lower when the session ended, and the 10yr note did increase a few bps to 2.30%.  The stock market has no resistance - it knows no boundaries as it climbs back for the DJIA to likely test its all-time high at 17,344. This morning the Oct consumer confidence index jumped to the best levels since Oct. 2007; durable goods orders were weak but cast off the fantail by traders and investors. There is no bad news for the stock market these days. The President stood in front of his helicopter this afternoon speaking about Ebola and reminding people that so far no American has died from it and those that have been treated have completely recovered other than the doctor in NY still being treated. We continue to hear that some investors and traders are worrying about the disease and that it has caused some of the recent market volatility. That doesn’t square with the bond market though - rates have been increasing since Ebola became a serious event.

With the 10yr at 2.30%, it is still uneasy as we shall see it either improve rates or they will continue to go higher towards the next level at 2.40% while taking mortgage rates with it.

In summary, all eyes and ears of the market are now tuned in to the Fed Rate decision tomorrow afternoon. It appears we won't have much movement until then. For those closing in the next 15 days the risk reward tradeoff is unfavorable towards floating in my opinion. I would protect what pricing we have now to protect against any uncertainty that triggers a sell off. Beyond 15 days is simply a gut check on your risk tolerance and ability to withstand losing a gamble on rates improving. Of course, it's possible that gamble could pay off.

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.