Mortgage rates have remained steady through middle part of October but last week we saw rates deteriorate an average of .125% by Thursday.
Mortgage Rates Currently Trending: HIGHER!
Depending on the lender, as we saw MBS (Mortgage Backed Securities) pricing deteriorate and test the support level of 102.00 after the announcement from the Fed meeting and the much higher than anticipated Chicago PMI number.
The economic data ‘spooked’ the markets. They are concerned the Fed may not wait until next March to start tapering their $40 Billion/month bond buying spree. This resulted in bond prices falling and led to a Friday sell off that tested the support level at 102.00 which appears to have held up.
Mortgage Rate Forecast for November 4-8th: NEUTRAL, but High Threat of Volatility
This week we will be dealing with the October employment data being released on Friday, which will be the focus for the week. On Thursday the third quarter GDP numbers will be released, and depending on if we meet market expectations or fall below could lead to either an MBS rally or a sell off. If we continue to trade within the current channel, that bodes well for rates. However if we sell off and pierce the support level at 102.00, be ready to see rates jump.
Should you LOCK or FLOAT Your Rate?
BOTTOM LINE: There is a risk to floating right now, but also potential reward. It will depend on when your loan is closing and what your level of risk tolerance is.
The best course of action is to stay in contact with your Mortgage Loan Professional who cares enough to follow the market in real time to stay a step ahead of lender reprices and market trends to protect your mortgage rate.