Well, it’s Friday morning and we’ve made it through a week of Treasury auctions, G8 meetings and squabbles over how bad the economy is. What are mortgage rates doing today?
So far, they’ve stayed pretty stable from yesterday. A combination of falling oil prices, gloomy economic attitudes, blunt and disappointing earnings reports and a dismal attitude in the stock market helped the bond market make it through a very big week worth of Treasury auctions in pretty good shape.
My recommendation still remains to lock all loans. Why? A couple of reasons:
- A “gut” feeling that the bond market has over reacted to the good news and rates fell more than is justified.
- The increased call for a second stimulus package will put upward pressure on mortgage rates.
- The growing “talk” about a change in reserve currency (see this week’s Mortgage Market Week in Review for more on that) if it does anything will put upward pressure on rates.
I’m currently estimating a 70% chance that rates will go up and a 30% chance rates will go down.