Mortgage bonds continue to improve in early morning trading as the stock market takes a breather from the rally that has sustained for many weeks. This seems to me to be a temporary change that will provide a short-term opportunity in interest rate pricing. Since the news driving the stock market is heavily based on fears of a global economic slowdown, this is driving money into a bond market that appears to be in an overbought position. For that reason, I anticipate we will quickly find a new ceiling and bond prices will fall.
The good news is that bond prices are now at high prices not seen since the great price fall in late 2017. This means we are in waters not chartered in more than a year. This also bow provides the opportunity for prices to continue to climb higher in the weeks and months to come.
Once again, I’m going to reiterate my belief in a no-cost loan strategy. This will allow you to refinance again in 6 months if rates are even lower without losing anything. The strategy is to take steps along the path of a decreasing interest rate environment. There is no benefit in waiting. Get started now.
We will take a more conservative approach and suggest a locking bias.