Thursday, September 11, 2014 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 -
Mortgage rates were essentially unchanged today. The most prevalently-quoted conforming 30yr fixed rate for top tier scenarios remains split between 4.125% and 4.25%, with the closing costs associated with this being the only change.
Not much of day but MBS prices have drifted lower since this morning. The 10yr at 2.54% is slightly higher. Still testing the 100 day average on the 10yr note---and holding. Weekly jobless claims were higher this morning than expected, but still hanging close to 300K for the 4th week. The 4 week average 304K.
Tomorrow the first key data point this week; at 8:30 August retail sales; forecasts are for an increase of 0.6% overall and ex autos +0.3%. Also at 8:30 August import and export prices (imports -1.0%, exports -0.1%). 9:55 tomorrow, the U. of Michigan mid-month sentiment index is expected at 83.4 frm 82.5. At 10:00 July Business inventories are expected +0.4%. It is retail sales that will get all of the attention.
Tomorrow is Friday and we are not expecting much from markets with the weekend ahead and then the FOMC meeting next week. Technicals weak and bearish; the 10 holding at its 100 day average. A break above 2.55% will set a move to test the high rate at 2.57% set in early August on geo-political safety concerns. Do not be pulled into the idea rates will decline; that may happen but presently our outlook is for increasing rates through the end of the year. The only caveat I would allow is if geo-politics sends fears across the globe.
In summary, floating remains dangerous but we do have some solid support just over head on the benchmark 10 year. Following the strategy of float the highs, lock the lows, I would favor floating, but again that comes with risk. If the ceiling is broken, it could get ugly very fast. If 2.56% is broken, I would lock as quick as possible, until then I think floating is worth the risk.
Keep a strong look at the markets and continue to cautiously float if you do want to take a risk. Remember, if you want to know the benefits of locking your rate today versus floating, simply give me a call at 314-744-7806 or visit me on my website at www.CallTheMoneyMan.com. I have access to real time Wall St. data and instant market alerts with breaking news that I monitor throughout the day to assist us on making the informed decision.
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