So what is happening in today’s market? A couple of things:
- The stock market seems to be gaining back some of what it lost yesterday.
- The bad day in the stock market yesterday spiked some modest improvement in mortgage rates today.
- Today (and tomorrow) there are BIG (billions) in Treasury auctions and they are the longer term ones.
How those auctions go will have a potentially market moving impact on mortgage rates. Which way? A couple of thoughts:
- If the foreign governments continue to buy Treasuries, we could see the markets relax and some slight dropping of mortgage rates.
- If there is any likelihood that the markets are being stirred up by the talk at the G-8 Summit about a different reserve currency or a slowdown in government buying of our debt, we could see a spike upward.
I’m currently placing about a 60/40 odds on the second option rather than the first and therefore I’m recommending locking rather than floating.
I’ll write more as the events transpire.