Mortgage Rates Higher Today vs Friday

Mortgage rates today opened higher than they did on Friday. In addition to concerns about oil prices, trade wars and Middle Eastern politics, we also got a couple of economic reports. Retail Sales for March posted the first gains in three months and came in much higher than expected. Nice for the economy but not great for mortgage rates. However, Home Builders' Index fell one point, which was good for rates.

Where Are Mortgage Rates Going?                     

>>> Moving up the tight range we have been in lately

The anticipated response to Syria was generally as expected. What was not certain was when it would occur.  With the US moved on Friday night did take markets out of the equation since no markets were open and it allowed markets to think before those knee-jerk reactions. Opinions running the gamut as would be expected.

Syria is pushed to the back of the line now that the anticipated military response has happened. There will be a lot of discussions at the UN and other international forums, but as far as markets are concerned focus back to trade and the potential implications for economic growth and a return to thinking about the expected Fed rate increases.

Last week Q1 earnings season began. Not many reporting yet, but what has been reported has been positive; big banks JP Morgan Chase, Citigroup and Wells Fargo reported solid beats against the top and bottom lines, although those stocks sold off as future outlooks are not that good. Market volatility is likely to continue, although we do expect equity markets have more near-term upside than downside.

The 10-yr Treasury is back within its comfort range between 2.80% and 2.90%. No change in markets about increasing interest rates and the belief that tax cuts and infrastructure spending will boost growth this year. Through this week Fed officials will be speaking adding to the optimistic economic view and confirming more interest rate increases. Even though we saw a lot of pressure this morning on MBS and the 10-year Treasury yield, both have come back a little.  It is a long day, and intraday volatility in equity markets has been the norm.

Mortgage rates continue to be stuck in a very tight channel. This week we do not have any economic data that is likely to spike rate volatility. However, we have a lot of moving parts geopolitically that have the potential of moving rates.

Rate/Float Recommendation           

>>> Do not get caught, best to lock

Rates are rising overall. In general, pricing for a 30-day lock is the standard most lenders will (should) quote you. The 15-day option should get you a discount, and locks over 30 days usually cost more. If you can get a better rate (say, a .125 percent lower rate) by waiting a couple of days to get a 15-day lock instead of a 30, it's probably safe to consider.

In a rising rate environment, the decision to lock or float becomes complicated. Obviously, if you know rates are rising, you want to lock in as soon as possible. However, the longer you lock, the higher your upfront costs. If you are weeks away from closing on your mortgage, that's something to consider. On the flip side, if a higher rate would wipe out your mortgage approval, you would probably want to lock in even if it costs more. If you have yet to talk to a lender, give me a call or visit my website at CallThe Money Man.