What a boring day in the markets!
Stocks added to yesterday's gains and bonds added to their losses. This pushed mortgage rates marginally higher. The best 30 year fixed mortgage rates are still in the 4.125% to
4.375% range for well-qualified consumers, but less lenders are
offering rates below 4.25% today. If your lender is still willing to
offer a rate below 4.25%, your closing costs are about 25bps higher
today (0.25% of your loan amount).
AQ's comments from yesterday still apply...
We're not panicking over this sell off. There has been no change in
our fundamental economic outlook, we see no new reason to be optimistic
about a rapid recovery. What we witnessed today was a technical
adjustment, an adjustment that could reverse course on Friday morning if
the Employment Situation Report fails to match economist expectations.
It also an adjustment that could be built on if the employment report
meets or surpasses forecasts. Either way, the market remains
non-committal and fluctuations are expected to occur within a range. The
overall outlook remains highly supportive of low mortgage rates.
Now that doesn't mean we're all aboard the float boat though. If
you've been offered a rate at or below 4.25% and can still execute it,
we think you should cash in your chips and lock your loan. If you've
lost this quote and are back to square one, we think you can afford to
float as long as you're not on a deadline. Your borrowing costs might
rise a few basis points in the near term, but we think you'll have
another opportunity to lock in at today's pricing, and potentially
yesterday's pricing, sometime in the next month.
Remember our advice. This is extremely important!
The "best executed" lock/float strategy comes down to finding an
originator who knows the loan market, studies underwriting guidelines,
and just plain old gets the J.O.B done. You have to let the loan
officer earn their commission. That's how you "ride the float boat" in
this environment...make sure you have a damn good skipper. Plain and
Simple
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The Employment Situation Report will be released at 8:30am tomorrow. Economists expect the Unemployment Rate to move higher from 9.5% to 9.6% and they forecast a 100,000 person decline in Non-Farm Payrolls. A better than expected report will send mortgage rates higher while a worse than anticipated read will send consumer borrowing costs lower. The most sensitive note rates are those closest to par pricing, specifically base rates below 4.375%