The pending home sales figures were released at 7AM this morning and are usually not a big mover of markets. Pending sales were up slightly at .6% month over month, but down 18.4% year over year. In other gloomy news, the National Association of Realtors only expects sales to increase by .5% in 2008.
Although the 10 year note has ticked up to 4.13%, Mortgage Backed Securities remain relatively unchanged from Friday afternoon. As such, I don't expect much movement in Mortgage Rates today. Due to losses Friday afternoon, today's rates are as follows:
30 YEAR FIXED NOTE RATE: 5.75-5.875%
LOCK RECOMMENDATION: ALL EYES ARE ON TOMORROW'S FED DECISION. A MAJORITY AGREES THE RATE CUT WILL BE .25%. WHILE MANY STILL BELIEVE THERE WILL BE A .5% CUT. THE MARKETS CAN ALWAYS REACT WILDLY TO UNSUSPECTED RATE CHANGES. THE LAST TIME THE FED CUT BY MORE THAN EXPECTED, BONDS ACTUALLY WENT UP FOR THE DAY DUE TO INFLATION FEARS. AS SUCH, LOCKING IS THE CONSERVATIVE PLAY.
IF THE FED'S COMMENTARY TOMORROW INDICATED REDUCED FEARS OF INFLATION AND POTENTIAL FUTURE RATE CUTS, THE BOND MARKET WILL LIKELY REACT POSITIVELY. STAY TUNED TO THIS SITE FOR A MID DAY UPDATE TOMORROW.
IN GENERAL I FEEL THAT FLOATING IS SAFE IF YOUR CLOSING IS MORE THAN A FEW WEEKS AWAY (THOUGH TOMORROW COULD CHANGE THAT OPINION)
***The lock recommendations represent the author's opinion. In general, if you believe economic and technical factors will make bond yields go lower, you should float. Otherwise, lock if you like the current rates. The NOTE rate quoted is an example of what's available from the most competitive lenders in the nation. Depending on your location and qualifications, origination fees may be necessary to obtain this rate.***