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
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%