Mortgage Rates Heading to New 2014 Lows

Mortgage rates continued to head towards the low for 2014 as we have seen an exceptional two day run without any major news to spark this rally.   We are still seeing 4.125% as the most prevalent quoted conforming 30yr rate for top tier borrowers, but with little if any additional closing costs as now 4.0% is just around the corner.    

Lions and Tigers and Bears...oh my! It was fear of weak German news, fear of weaker global growth in 2015, a tanking stock market, fear of Ebola in Spain, and fear of mounting labor slack in the U.S. on massive unfiled job openings that led to a nice pick up in MBS pricing.  But what should you do if you are in the market to lock or float your rate? 

At times I wonder why it takes so long to see the reality, or has the reality been known for a while but ignored as long as possible. The IMF, not aligned to any business interests, out again today revising its global economic outlook lower--again. We saw it from the World Bank last week, we hear it from Janet Yellen and other more realistic Fed officials - the only part of the world that is showing any ‘significant’ growth is the US. So far investors have held onto the belief the US economy can continue to grow regardless of what is happening in the rest of the world, the parts of the world that carry the rest of it - Europe and China, and to a lesser extent some South American economies like Brazil. I am amazed that the recent data coming out by the Fed, the IMF, the World Bank and from various central bankers about how economies are doing have been completely ignored by investors. It is unbelievable that minions of Wall Street do not see know it - just like they did not know they were peddling  junk paper in 2006 through 2008 to inept investors.  

In summary, floating has paid off recently and the September bond market selloff is officially over. Maybe this is a sign of previous QE precedent , where rates tend to improve when the program comes to a close. With the stock market taking on some water lately as well, bonds are benefiting, which could indicate that 2014 rate lows are around the corner. 

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.