As we introduced last week we will be having our preferred lender, City Creek Mortgage, updating us every week or so with how mortgage rates are looking. Morgage Mike watches the market very closely and is a great way to decide when to buy, sell and lock. Locking your rate at the right time can save you hundreds each month and thousands over the life of your loan. Check out what he has to say this week about where we are headed and when you should lock!
Go ahead and take it away Mike.
“The bond market rally ended abruptly Friday afternoon, as the rebound in the US stock market gained steam. Investors were looking to cash in on some of the profits by selling bonds near their highs of 2015 and purchasing stocks which came back to life in the late trading hours. However, bonds remain within the upward channel that confidently pushed them through their 200 day moving average. With the 200 DMA now serving as support, there is an opportunity for bonds to take a breather while they build up muscle to power through another run higher. As long as bonds don’t fall beneath the bottom of the channel, a pull-back towards the lower end of the channel is actually a healthy move for the bond market.
Friday’s surprisingly low report on the job market from the Bureau of Labor Statistics (BLS) wasn’t a welcomed sign to the Fed. Fed members have made it clear that they will be data dependent as they look for the appropriate timing to make a move higher with short term interest rates. This makes an October rate hike less likely. Further, with the cold winter months typically causing a slowdown to GDP, this could have set the stage for the first rate hike not to be announced until sometime in 2016 or later… Although the US economy is still relatively strong in most areas, the trend is heading lower which will make a rate hike more risky and potentially damaging to the progress made so far. The Fed understands this risk well. We will have to wait and see what happens from here.
Bond prices will likely take a breather today. If you need to close soon, now is a great time to lock in your interest rate. However, if you have a while before needing to lock, you can wait and see if the upward channel will eventually carry bond prices higher. If prices drop beneath the bottom of the channel, lock the rate at that point.”
Thanks Mike! That’s some great info on the mortgage rates today and where we stand for the week. Look forward to hearing from you next week.