Thursday, December 18, 2014 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 -
Mortgage rates jumped again today even though Freddie came out stating that the rates are at 18 months lows - which they were as they are a little behind with their news. The most prevalently quoted conforming 30yr fixed rates for top tier borrowers was still at 3.875%,but 4.00% came back into the picture today.
Even though the session in the bond and mortgage markets was a bit quiet compared to yesterday, we saw the same as well in the key stock indexes as compared to the large swings back and forth we have seen this week. The stock market has had very strong rallies yesterday and today - DJIA up 709 points in 24 hours. Investors and traders got a reprieve in a sense with the policy statement yesterday that said the Fed would be patient and dependent on incoming data to decide exactly when the Fed would begin increasing rates. Yellen then at her press conference said that the Fed would not be 'lifting off' until at least two more meetings. Investors upping the ante a little today rallying the stock market, likely markets are taking the view that the continuing decline in crude is a strong plus for the economy after sweating it last week as a negative. Crude started the day unchanged but selling this afternoon sent the price down again.
There are no scheduled economic reports tomorrow. Tomorrow is quadruple witching day - options are expiring in equities and interest rates. Today's huge increase in key indexes, just like the huge declines early this week and all of last week should not be taken too seriously, markets likely will remain volatile tomorrow and into next week when many will be taking off through the end of the year. This time of year is always volatile with big investors and hedge funds wrapping up the year.
I would love to see the markets settle now - as the 10yr did hold its first minor support at 2.21% today, still holding a slight near term bullish bias however.
In summary, with a little more bounce in rates today, and the 10yr going above my benchmark, I would recommend to seriously lock in these rates now for short term and if you have not done such for the long term, the risks seems to have gotten larger than before.
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 my website at www.CallTheMoneyMan.com. I have access to real time Wall Street 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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