Rates ticked down slightly last week. As a reaction, we expect rates to tick back up. Inflation concerns still permeate the economy, especially as summer approaches and energy and food prices skyrocket. To ensure adequate returns on investment, mortgage investors will demand higher rates.
This week is very light in terms of economic releases scheduled to be posted. There are actually three reports scheduled that are worthy of addressing, but none of them are considered to be highly important to bonds and mortgage rates.
In addition to this week's economic data, we also have Treasury auctions that can influence bond trading and affect mortgage rates. The Treasury will hold a 10 year Note sale Wednesday, and 30 Year Bond sale Thursday. Results of the auctions will be posted at 1:30 PM ET. If they were met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding could lead to higher mortgage pricing those afternoons.
Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.
Search today's mortgage rates anonymously. And, as always, you can call me at (508) 471-4144 with any questions about mortgage rates and to discuss your best loan options.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB