Mortgage Rates Lower Even Though the Market Shows Differently
Mortgage rates moved a bit lower today, even though
the market was telling us that it should have increased. Both Treasuries and MBSs lost ground today, which
usually results in higher rates and/or fees to those rates, but it was not the
case today.
There was a number of reports this morning that had a
mix bag of results, mostly though on the negative side. AS one economist
stated, even though the data was disappointing, it was marginal as some of the
data suggested inflation was increasing.
We saw crude oil lower, the dollar continues to fall, and the euro on
the rise.
The US bond and mortgage markets saw price declines
today, not much but as I have noted the rate markets are not as bullish as the
improvement last week may have suggested. Price action that dropped rates last
week appear to be just short-covering by traders that were betting rates were
about to increase, price movement since last Wednesday does not look like a lot
of new buying. The technicals essentially are neutral now, the bellwether 10yr
note that sets the direction for mortgage rates has not broken any significant
technical levels. The first key level at 1.80%, a close below that would likely
trigger a run lower in rates. A close over 1.93% will do the opposite –
presently price action is not aggressive in either direction.
In summary, not a great start to the week or the new
month, but it could always be worse. We
are trading in a confined range for now, and personally I think it is great
compared to what we have seen the past three weeks. Interest rates are low, and with the trade
being confined in a tight range it really allows for a little bit of stability
in the range of rates for borrowers.
This current range allows for more time to make a decision in locking,
which may not be a bad idea to consider when the markets open in the morning. Be careful and watch the open to determine if
the rate today is the one you should go with.
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