Mortgage Rates Close to 3-Years Lows

Mortgage rates moved sideways today, taking them one step closer to hitting the three-year low mark – but we are yet there officially.  US and global markets sitting still the last few sessions, no movements in the US of any significant consequences. The Fed is in play for a June increases, then it is not, pending who is speaking or what we read. This kind of condition is one that can go either way.

The technical analysis is a mixed bag. I use so many tools that I cannot spend time going into them.  Suffice it that I come away not sure what to think about the very near term. There are no serious economic releases this week until Friday and the uncertainty about global markets keeps investors with their hands in their pockets. 

Most times I have a good grip but recently I have to say I don’t know. Not the comment you might expect but I always call a spade a spade and do not try to wing it or fake it. This kind of condition will not last long however - whichever way it breaks will likely to a significant move.

The dollar’s strength (or weakness) is a significant component in trading now. The dollar has weakened the last three months, has it found a bottom? Too uncertain. Crude oil has increased from $25.00 to $47.00 dollars and now has backslid to $43.00, is it about to decline further, or continue to increase more? Too uncertain fundamentally or technically. The Fed overall wants to increase the FF rate but has had to hold off, fearing the response in the equity and interest rate markets, will the Fed move in June as NY Fed’s Dudley thinks? Too uncertain. Is China’s economy about to slide further? Too uncertain. Is inflation increasing? Depends on how the Fed sees it.

How long with these conundrums last?  Too uncertain, but when the dyke breaks it will release a lot of movement. Until then, I will wait for opportunities and try to avoid the chuck holes. Everything said above is the current status of markets. The technical work remains slightly bullish, but is not gaining any momentum.

Right now I suggest to cautiously float as I stated this morning, if you can handle the risk.  However, there will be no shame in taking these rates and enjoying the rest of the world.

In summary, pricing improved, slightly, AGAIN today, as oil slid back.  There was not any particular economic data moving the markets, and gains under these circumstances mean more, to me, than those with obvious motivation.  I am not locking anything further than 30 days from closing, and borrowers with some risk tolerance who are 20 days+ out may still consider floating.  The trend is our friend, the only question is for how much longer.