Mortgage Market Update
Mortgage Market Update- January 20, 2013
For those who were watching the bond market on Thursday, there may have been more than a moment or two of panic. The bond market ticked upwards on Thursday, thanks largely in part to volatility in the Mortgage Backed Securities (MBS) trading. Fortunately, these rates settled down on Friday and rates settled back down. While rates are still higher than the beginning of the year, they are still relatively low.
Rate lock warning
Many lenders are warning their clients to lock in their current rates. This is largely in part due to the fact there is an expectation that rates will continue their slow march upwards. There is a slight chance that rates may tick lower but chances are they will continue to lean slightly higher.
One of the main things that buyers and refinance candidates should keep an eye on is what is going on with Congress regarding the debt ceiling as well as the sequester. While there has been some movement showing that the debt ceiling will be increased, the sequester could be problematic. It is important to note that there have been threats of a partial (or complete) government shutdown and to note that if government spending decreases as much as the sequester demands, the possibility exists that the bond markets will actually get stronger.
The upcoming week
While consumer confidence seems to be lower than it has been since December of 2011, the upcoming week may be a better indicator of how consumers feel. Many consumers indicated concern about the Fiscal Cliff though this has been partially avoided at this point. While the bond markets are closed on Monday to observe Martin Luther King Day, there are several reports due out this week including:
Tuesday January 22
Wednesday January 23
Thursday January 24
Friday, January 25
These reports should have an impact on the overall bond market but it is too early to tell what the impact will be. Keep in mind that if you are currently working on a purchase mortgage or a refinance mortgage that it is never a bad idea to lock in your rate. Locking in your rate may protect you from unexpected jumps in overall mortgage rates. Since rates are still relatively low, the downside is very small. If you are uncertain if your rate should be locked in, contact Core Mortgage Financial. We’ll be happy to review your current mortgage terms and help you determine if this is the time for you to consider locking your rate.
Disclaimer: This article is for informational purposes only. Please call our office for mortgage market updates and rate lock guidance.