Mortgage rates last week improved an average of .125% to .250% in rate because the MBS (Mortgage Backed Securities) market recovered more than half of the sell off that we experienced on Friday, November 8th. And today, November 18th, the bond market improved even more (lower rates).
Mortgage Rates Currently Trending: LOWER!
Many lenders will find rates and rebate pricing close to what we last saw on Thursday, November 14th, before the MBS selloff. Especially well received last week was the speech by Janet Yellen in her confirmation hearing, which led traders to feel more secure that Fed tapering of bond purchases would be held off until at least 2014. For the week we gained 70 basis points, but those numbers are skewed by Tuesday’s bond rollover.
Mortgage Rate Forecast for November 18-22:
Starting the week neutral to lower, with chance of rates going higher
There may be a small amount of rate improvement left on the table (like today), maybe another .125% or simply improved rebate pricing (the credit your lender gives you towards your closing costs), but economic data on Wednesday and Thursday could see an MBS sell off resulting in rates worsening.
Should You Lock or Float?
BOTTOM LINE: You should talk to your Mortgage Loan Professional this week to weigh the possible benefits of floating your interest rate or locking in, based on your unique scenario.
Wouldn’t that be a bummer if your mortgage loan officer doesn’t track the markets, treasuries, and MBS market this closely?
If we break above the 102.00 resistance level we will see improved mortgage rates. However if we fail to reach it, or bounce off of it, we will see mortgage rates inch up for the worse again. Which way we go will depend greatly on Wednesday and Thursday economic data, so be ready to work with your Mortgage Loan Professional to react.