Mortgage Rates Held Steady Today

Mortgage rates held steady today, even though there was some improvement in the Mortgage Backed Securities.   This is somewhat refreshing because after yesterday’s bumpy ride.   Even though the gains todays did not push rates lower, the most prevalently quoted conforming 30yr fixed rates for top tier borrowers was still at 4.125%, but 4.0% was there with fees.

A better Q3 advance GDP this morning as it showed the US economy expanded at a healthy 3.5% pace during the third quarter, a sign of sustained growth fueled by government spending and a narrow trade deficit despite mounting concerns about the health of overseas economies.

Even though the market was excited by this news, there should be some caution before throwing out any concerns about growth – which so far is not that good.  The year started with largest contraction since World War II that wasn’t part of a recession, followed by a roaring rebound, now only to end 2014 with mounting fears of a global slowdown. The result? Growth in gross domestic product this year looks pretty much the same as the last five. Several economists are projecting economic growth to slip from the 3.5% pace recorded in the third quarter to a rate between 2% and 3% in the fourth quarter. Forecasting firm Macroeconomic Advisers pegs the current quarter’s advance at 2.4%.

Market volatility is not dead yet – after a few somewhat quiet days – it should show some signs that it can increase again with four data points being released.  Just a word of note, the 10yr did trade peacefully today as there was no change from the morning open when it closed.

In summary, after the Fed announced an end to QE yesterday, it appears the rate markets are treading water until finding more convincing motivation. That could happen next week as we get the all-important Jobs Report as well as activity out of the European Central Bank. The bias seems to be to the upside now which lends me to believe locking these rates is prudent for now. Float carefully.

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.