Another crazy day in the market. After a full day for everyone to be able to fully digest the notes to the last Fed meeting, the news was mixed. First the Fed talked about the economy still not being on track to a solid recovery here in the US or in Europe. They also mentioned that they may decide to stop purchasing Mortgage Bonds and Treasuries know as Quantitative Easing (or QE3) sooner rather than later as it no longer appears to be helping to stimulate the economy. Now this message would normally send stocks on a major rally and push mortgage bonds lower (which means home loan rates go up), but it was the other part to that statement that investors listened to. They stated that they would most likely not sell off all of the bonds and treasuries that they already hold right away to avoid flooding the market and thereby deflating the values of those bonds held by other investors. Also the key part was that they acknowledged that the economy is not getting much better and that tends to scare investors out of riskier investments such as stocks. This caused the stock market to start a bit of a sell off and mortgage bonds were the beneficiary of that sell off for most of the morning. The bad part is that mortgage bonds could not maintain much of a rally today, and gave back half of the profits by close of market ending the day up by only 11 basis points.
Now mortgage bonds have a thin level of support just below were they closed for the day, but it is not a very strong one. There is also quite a bit of room above us before hitting any hard levels of resistance, so I recommend to cautiously float into tomorrow trading session. Watch the above video to see exactly were home loan rates closed for the day.
If you would like to talk about your specific scenario or needs, please do not hesitate to call or email me directly.
*This statement of current rates is not an offer to enter into an agreement for a loan at a specified interest rate, number of points or both. Current interest rates and discount points are subject to change at any time without notice to you. Stated rate examples were calculated using a $300,000 loan amount, 80% LTV and 720 Min Fico at the stated term lengths. Licensed by the Dept. of Corporations under the CA Res. Mtg. Lending Act – 431-0421; Rates and charges in the advertisement do not apply to all loans made by the financial institution.
Rob McNelis
Loan Officer - NMLS# 830519
Direct: 619.279.6162
robm@summitmortgage.com
www.robmcnelis.com
