Wednesday, February 12, 2014 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 -
Today rates have already reflected yesterday's turn of events with the Mortgage Backed Securities (MBS) and this morning after the Bond Rollover, it is still continuing down the wrong path for Mortgage Rates. We have seen rates jumping above the 4.375% that we quoted yesterday for ideal scenarios, as I do believe we are leaving that mark behind us. There is nothing in the economic data reports to stop the slide. All that is scheduled today is the 10 year Treasury auction at 1pm EST. If you're closing in the near term, discuss locking with your mortgage professional to avoid further rate deterioration. From a report I saw today and posted on my Face Book Page (https://www.facebook.com/CallTheMoneyMan?ref=br_tf) "With the unemployment rate at 6.6%, dangerously close to the 6.5% level at which the Fed has repeatedly suggested they will start raising short term rates, expect some quick Fed backpedaling. With wages stagnant, labor force growth weak and tapering having barely begun, a rise in short term rates will not happen. The Fed will either overtly deemphasize the unemployment rate or reduce the threshold to 6%." We all are expecting the former as the reports from the Feds have already seen this trend unfolding, as they have clearly stated over the past couple of months that the Fed Funds Rate will stay low "well past" the point where the unemployment rate hits 6.5%.
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