Mortgage rates - where are they going short-term (within next month)?
We have to lock our rate on a 30yr fixed (under 500K for 2 fam, NOT jumbo) and wonder if the financial whiz’es out there have advice on the short-term outlook. I know this is asking for crystal ball but aren’t there rational aids to predicting?? Today they seem to be hitting almost 5% and…
We have to lock our rate on a 30yr fixed (under 500K for 2 fam, NOT jumbo) and wonder if the financial whiz’es out there have advice on the short-term outlook. I know this is asking for crystal ball but aren’t there rational aids to predicting?? Today they seem to be hitting almost 5% and I wonder if they’ll just go higher or tick down a bit…
I CAN DO THIS LOAN TODAY AT 4.75%.
YOU WOULD HAVE TO PAY A 1% BROKER FEE- NO POINTS TO THE BANK A THIS IS A “PAR” RATE TODAY!
Vanessa Thatcher
ATLANTIC HOME CAPITAL
Tel: 631-687-3510 x106
EFax: 631-918-5222
Cell: 631-672-4113
http://www.atlantichomecapital.com
You can also catch me at :
Montauk:
http://www.montauk-online.com/?s=Real+Estate/Mortgages
Brooklyn:
http://bstoner.wpengine.com/directory/Mortgage_Brokers
http://bk.ly/tUo
10-year rates have been consolidating sideways to slightly lower between 3.25-3.5% for the past month, taking a breather after jumping 100 basis points through mid-December. Rates are still very low historically and shouldn’t have been as low as they were mid-autumn. The economy is improving (and data should continue to improve); the stock market remains constructive (it is due for a correction but there remains a lot of underinvested cash waiting to come in); and energy and commodity prices are elevated. All of this points to still higher yields.
In the very near-term, the only way for yields to test back lower is if the stock market pulls back, lifting Treasuries. Potential catalysts would be disappointing corporate earnings, bad economic data that challenge the recovery thesis, benign inflation data, or an external surprise for the markets (bad China inflation/surprise Chinese rate hikes; European sovereign debt jitters; N Korea drops a bombshell). The Fed meets next week but shouldn’t have any surprises for the market as it continues its bond buying program.
If 10-year yields do retrace a bit lower in the near-term, they would likely only retest down to the 3-3.25% range. That is possible, but they are not going to go much lower than that, and if the economy keeps recovering and markets stay constructive, then yields are only going higher from here.
Risk/reward right now, you have perhaps 25 basis points of downside and 100 basis points of upside. Downward movement will be hesitant and grinding, upward moves can come sharp and fast. If Treasury yields dip, banks will resist passing them through to you in the form of lower mortgage rates. If yields jump, banks will pass them through into higher mortgage rates immediately.
So if you have a good rate now, take it. If you hold out for lower rates and they instead run away from you sharply to the upside, it would suck if you need to buy soon. If that happens and you have patience, the economy can’t take substantially higher yields, so at some point those higher yields will scare the stock market into a correction and bring the yields lower again.
Happy trading!
The rational aid I know of is the 10 year treasury rate – 30 year mortgage rates will move with it. Anyone with a crystal ball that can accurately predict if rates are going to tick up or down could be getting filthy rich on wall street.
I was going to post the same question about a week ago. I’m refinancing. Ended up locking it because it was stressing me out too much. After doing the math I realized that if rates fell a bit, I’d only be saving about $50 per month. Now, if they fall below 4% again (15 yr), that’s another story!