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Bart Castelli

Mortgage Rates Continue to Go Lower

Tuesday, October 14, 2014 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 - Message

Mortgage rates continue to go lower today as we saw something that we have not seen in nearly for a long time. Today marked the first time a person with outstanding credit and ratios were quoted 3.875%, even though there was some fees associated with it as now 4.0% is now the most prevalent quoted conforming 30yr rate for top tier borrowers.

How do like these headline reports:

  • Europe is sinking while the US is still growing.
  • Recent economic reports from the EU continue to decline driving the euro currency down against the dollar and in turn pushing crude oil lower based on the dollar.
  • The Fed out yesterday with comments that slower global growth may delay U.S. interest-rate increases.

Why you should care about what is happening in the world and not just here.The simple direct answer is that the world now is just one economy - there is no Europe, China, Japan, emerging markets, or the US that can stand independently for any length of time or grow at its potential unless the global economies are improving - certainly not declining. Interest rates in the US do not stand alone either; our rates are higher than most G-7 countries and our bonds are the most secure in terms of default. One can't simply focus on US data any more, you have to take it all in.

Interest rates are going to decline more between now and the end of the yearbut the path will have deep chuck holes to navigate (that analogy probably means nothing to those living in warm climates). The 10 and MBS markets are bullish but presently overbought and a pullback is close. Given the soft equity market, if it continues the momentum oscillators that are much overbought will not matter.

In summary, lenders have yet to pass along all the gains that could/should have been realized at these levels. I personally think that floating cautiously, is a good option at this level, because simply maintaining Treasury and MBS prices at this level will lead to better rates for consumers.

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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