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The stock market is continuing it’s rally today as the DOW is pushing back towards 14,000 and may even make a run at all time highs. The stock market was fueled this morning mostly by Core Logic’s announcement that the housing market continued it’s month over month increase in December by another .4% bringing the year over year increase to 8.3% from December of 2011.
Being that the housing sector is one of the largest drivers of the economy, and with little other economic news being released this week, the stock market bulls pulled their money from mortgage bonds and went back to the riskier stocks. This in turn pretty much erased most all of yesterdays gains for the 3% Fannie Mae mortgage coupon. I still believe that stocks are over bought and are past due for a correction in the market, but there is something to be said about momentum (just ask the Ravens). So will that correction be soon, or after a new record is set for the DOW? That is yet to be seen.
What I can tell you is that the mortgage bond market is facing some VERY stiff resistance at the 200 day moving average that used to be our friend and pillar of support and is now a bitter foe that will not let us pass. In the short term I think that locking is prudent, but if you are in no hurry, there is still a good chance that we can see a correction of as much as half a percent in rate in the coming weeks to month. With the “Debt Ceiling” still to deal with and troops that will be returning home to a reduced military bias in government, unemployment is going to probably get worse before it gets better.
If you would like more information, or want to go over your specific loan scenario, please call or email me directly.
Rob McNelis
Loan Officer – NMLS# 830519
Direct: 619.279.6162
robm@summitmortgage.com
www.robmcnelis.com
