The Bridgewaters, Massachusetts

Mortgage Commentary

The dollar weakened, fuel prices rose, and the Fed kept short-term rates low. These are the ingredients for inflation. In addition, economic trends, inflationary concerns and the housing market numbers all indicate higher mortgage rates.

The turmoil in the mortgage market - not quite eerily quiet in the past couple of weeks - came thundering back into public view last week as Fannie Mae and Freddie Mac found themselves increasingly battered by the mortgage, housing and investment markets.

Mortgage rates remained pretty calm throughout most of last the week. However, along with a fair rout in equities, there was a considerable sell-off in T-bonds on Friday (the proceeds of which seemed to land in oil and gold), so T-bond yields rose appreciably late in the week. That and the continued fear of inflation may add slight upward pressure to mortgage rates this week, but the tug of a declining economy remains strong.

This week brings us the release of six important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

It will likely be an active week for mortgage rates with a fair amount of volatility, so please maintain contact with your mortgage professional if you're still floating an interest rate.

• If you have an adjustable rate or need to get cash out of your home, don't wait for rates to go up even more.
• If you have found the right home to buy, secure your financing today.

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.