Equities were up big time on Friday and that trend continues today at the expense of Bond** yields that continue to climb higher on the expectations of better than expected jobs data to be released (that’s right, on the expectation of an expectation) and a better outlook for payday advance online and stronger first quarter earnings. I received three upward rate adjustments on Friday, and expect at least one today based on the market’s performance thus far. Key releases of economic data will begin Wednesday, so watch for those numbers, particularly the new jobs data, to impact the market. It will be interesting to see how the market factors in the Grocery union strike ending and those people going back on the payrolls. As one would expect, Mortgage rates/costs* are climbing right alongside the bond yields, but they remain very low historically and about 3/8% off their all time 50 year lows reached on June 10, 2003. The benchmark 10 year Treasury** yield is about 3.90%% as of this posting, up from a nine month low of about 3.68% reached a few weeks ago, but down from the 4.5% range it reached last September when rates climbed up to 1.5% after dropping to 3.00% on June 10, 2003.
So with the Feds doing nothing since last July 2003, you can see what really drives mortgage rates and that’s the equities and bond markets. Since the beginning of the year, equities have pretty much coughed up all their early January gains but if this was just a healthy correction, it may be headed for another leg up. If this trend continues, it may result in increasing rates but that may be short lived given this fragile economy can’t afford high rates until the consumer bounces back with a stable job situation and cash (or credit) to burn at the big box. Check out the payday advance online lists I have prepared to see the events that can impact mortgage rates and costs. I also have what are now some dated, but still relevant charts that show rate trends. It's also interesting to see who the bond traders really are and what drives them in their decision-making. The most significant part of your mortgage financing decision should be the loan type you choose which depends on how long you intend to own the home and your risk tolerance. But your lock strategy is really key because you can always switch the loan type during the process, but deciding on when to lock is key, and once you lock, you got to rock. My view is that if you can improve on what you have with out adding much to your loan balance, why wait, it could get worse. If it gets better, read my policy. I’ll relock the loan and pass any benefit to you. Hopefully the list below, this website, the links and all the other research you've done will help you to work with your mortgage broker (hopefully me) to make the right decision.