Monday, May 2, 2016 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 -
Mortgage rates moved a bit lower today, even though the market was telling us that it should have increased. Both Treasuries and MBSs lost ground today, which usually results in higher rates and/or fees to those rates, but it was not the case today.
There was a number of reports this morning that had a mix bag of results, mostly though on the negative side. AS one economist stated, even though the data was disappointing, it was marginal as some of the data suggested inflation was increasing. We saw crude oil lower, the dollar continues to fall, and the euro on the rise.
The US bond and mortgage markets saw price declines today, not much but as I have noted the rate markets are not as bullish as the improvement last week may have suggested. Price action that dropped rates last week appear to be just short-covering by traders that were betting rates were about to increase, price movement since last Wednesday does not look like a lot of new buying. The technicals essentially are neutral now, the bellwether 10yr note that sets the direction for mortgage rates has not broken any significant technical levels. The first key level at 1.80%, a close below that would likely trigger a run lower in rates. A close over 1.93% will do the opposite - presently price action is not aggressive in either direction.
In summary, not a great start to the week or the new month, but it could always be worse. We are trading in a confined range for now, and personally I think it is great compared to what we have seen the past three weeks. Interest rates are low, and with the trade being confined in a tight range it really allows for a little bit of stability in the range of rates for borrowers. This current range allows for more time to make a decision in locking, which may not be a bad idea to consider when the markets open in the morning. Be careful and watch the open to determine if the rate today is the one you should go with.
Didn't find the answer you wanted? Ask one of your own.