04/01/2010 Mortgage Market Conditions by Brian Cav

Home LoansImage by Jeremy Brooks via Flickr


Mortgage Market


Wow, what a few weeks it has been. Last week we saw Mortgage Rates go from 2010 lows to highs in a matter of 3 hours! There was a bit of a correction the end of last week (In which I called, thanks) and then again an increase in Mortgage Rates earlier this week. I think the safe play right now is to LOCK your rate in... no matter if you are closing in 2 weeks or the end of May. There are to many things out of your control in the short term.

• The Fed is done buying MBS this week = reason why rates have been near all-time lows for the past year

• Employment report on Friday = very important

These will make the end of this week one of the more volatile Mortgage Markets we have sen in a long time.

However, the economy has not gotten any better, maybe this keeps Mortgage rates down for a while longer?

Inquire within for current Mortgage Rates.

Economic Data

Wednesday's bond market opened in positive territory after this morning's economic news didn't surprise anyone. The bond market is currently up, which should improve this morning's mortgage rates of a bit

The Commerce Department gave us today's only relevant economic data when they released February's Factory Orders late this morning. They announced an increase in new orders of 0.6%, but also revised January's orders higher than previously announced. So, this data can be considered neutral or favorably to bonds and mortgage rates.

Being posted tomorrow are weekly unemployment figures from last week. The Labor Department will release the number of new claims filed last week for unemployment benefits, giving us a small reading of labor market strength or weakness. They are expected to announce that 440,000 new claims were filed. This would be a slight decline from the previous week.

We also can't forget about Friday's unique circumstances. It is Good Friday and recognized as a holiday, so the stock markets will be closed. However, the bond market will be open until noon ET Friday before closing for the holiday. In addition, we have a highly significant piece of data being posted at 8:30 AM ET Friday when the Labor Department will release March's Employment report. This makes it very likely that we will see plenty of movement in bonds and mortgage rates before the bond market closes at noon. It also means that we can expect to see more volatility Monday morning when the stock markets have an opportunity to react to Friday's data, which also will influence bond trading. It will be interesting to see what transpires those days, especially if Friday's report reveals surprising results.

FLOAT or LOCK

If I was closing on a Home Mortgage in the next 0 to 15 Days - LOCK

If I was closing on a Home Mortgage in the next 15 to 30 Days - LOCK

If I was closing on a Home Mortgage in the next 30 to 60 Days - LOCK/FLOAT

If I was closing on a Home Mortgage in the next 60+ FLOAT

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

• Are you a possible Massachusetts First Time Homebuyer?

• Do you have any Refinancing questions?

• Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?

bc@SmarterBorrowing.com  - 617.771.5021


Credit: Bloomberg, Yahoo Finance, Mortgage News, MBS Quoteline, WSJ, NY Times


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