Last Week's Mortgage Rates Recap
Last week saw interest rates remain very stable, not really improving too much even though we did see some MBS (Mortgage Backed Security) market improvements. Why does this happen? Well, many reasons can contribute, including supply and demand (lenders have a very strong supply right now and don't need to pass market improvements on to consumers to capture more business), as well as secondary pricing desks hedging against rapid market deterioration. What's all this mean in English? Simply that rates remain flat.
This Week's Mortgage Rates Forecast
Risks Favor: FLOATING
Now that we are seeing a new trend in MBS performance, and technical signs point to short term interest rate stability, we can advise to float and see if we may experience some improvement. Be careful though, there is a lot of economic data being released this week that will cause daily volatility. So, let's recap: mortgage interest rates will probably end the week where they began them, meaning that rates are pretty stable. However, during the day, we may see volatility which means that rebate or loan pricing may be affected even though interest rates themselves remain unchanged. On a $200k loan, a difference of .5005 in loan pricing or rebate is $1,000 in out of pocket costs.
So for this week, any consumers who are less than 7 days out from closing may want to just lock in the great rates we see. Anyone more than that should watch the market with their mortgage loan originator and see if we may find even more improvement on the horizon.
BOTTOM LINE: Improvements in rate will come grudgingly, but if the stock market recovery we've been waiting for finally happens, we may improve by about .125%.
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