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Bart Castelli

Mortgage Rates Starts the 4th Quarter with a Bang

Wednesday, October 1, 2014 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 - Message

Mortgage rates continued to move in a positive direction as the 4th Quarter has started off with a bang! Today's improvement brings back rates where they were at the beginning of last month. The most prevalently-quoted conforming 30yr fixed rate for top tier scenarios remains at 4.25%, but 4.125% is now in the picture with the closing costs associated with this being the only change.

Here we go again with the stock market and debate about whether this time is the real beginning of the long awaited correction. We have been through it numerous times in the last six weeks, each time when there was selling that took the indexes down in big moves, we wondered if that was it, each time we and everyone else regretted being influenced by the one-off selling. Is this the one? If so we can see interest rates down another 10 to 20 basis points in rate and MBS rates down 10 basis points in rates. So far it is a what if thing so we are not going to proffer a guess. That said, as you know we have never been that excited about the economic growth that has occurred; the building blocks are not there in jobs that pay a living wage and young people are loaded debt keeping them from forming new households.

The bond market added a lot to its bullish bias today with the huge move lower in rate, the stock market continue to trade with a serious amount of uncertainty as is clear by the wide swings in the indexes we have seen in the last couple of weeks. Moves like we experienced today in stocks and bonds usually increase interday volatility. With employment on Friday some stock market improvement and selling in the bond and mortgage markets cannot be ruled out tomorrow. That said, the bullish technicals are strong and project lower rates ahead.

In summary, a nice rally today to start off the 4th quarter. While this could be an indication of a trend towards even better pricing in the near term I think it makes sense to take advantage of this improvement here and protect these gains for borrowers with closing dates in the next 15 days. We have potential fireworks in an ECB Rate decision tomorrow and the all-important Jobs Report on Friday. If you are a risk taker, then continue to float if you can deal with volatility and potentially more risk that could become a reality.

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 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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