Mortgage Rates Pulled Backed Off Lows

Mortgage rates pulled back off their recent lows as the three day weekend approached.   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.     

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?

What a week!  Finally the stock market is acting as it should. With no big correction for months and prices going up almost daily, the equity markets were way out on a little limb and now the limb is braking. Not yet falling to the ground, but the decline in stocks here and around the world is not a one and off this tome as previous selling has been. Stock indexes are going to weaken more next week, and the volatility will continue at the high levels we had this week. 200 point swings for the DJIA are going to be the norm for a while now.

After wide swings each day this week, today it was time to take a breather. Not much movement in either stocks or bonds ahead of the week-end. Investors and traders can take a couple of days to think about next week. Monday the bond and mortgage markets will be closed for Columbus Day, equity markets will trade. No data on Monday and most economic data not until later next week. Once again a number of Fed officials will be speaking but as this week not much attention to their remarks. Talk is cheap and these days its decision time not to be confused with every other Fed official having a different outlook.

Interest rates are likely decline a little more but not before some retracement. The stock indexes will also decline more from current levels but not before some retracement and consolidation. The fall in equities this week did not dent the overall bullishness; until no one wants stocks the outlook is for lower equity markets and better rate markets.

In summary, the early morning weakness with MBS resulted in lenders worsening rate sheets much more than what was warranted.  This is common especially when facing a 3 day weekend.  I am not a fan of locking on Fridays, but even less of a fan of locking on a Friday ahead of a 3 day weekend.  I feel lenders tend to be ultra conservative ahead of the long weekend.  My advice is to float till Tuesday.

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.