Markets continue to play out in the way we have anticipated, with stocks now showing signs of weakening and mortgage bonds remaining within a defined trading range. As this pattern plays out, we can anticipate seeing continued downward pressure on mortgage interest rates as well as on stock prices in the long term. In the short term, however, the movements do not happen within a straight line. This means that as bond prices hit up against ceilings, rates will experience upward pressure as they regain their strength to make another move. As a result, we will take a cautious approach for short term locking opportunities and be more prone to having a floating stance for longer term opportunities.
The Case Shiller Home Price Index showed that appreciation in home prices continues to slow. With this report considered to be the most respected source of home value data, this should be a concerning report for those in the housing industry. If this trend continues, we can expect to see the appreciation charts flatten. Whether or not they will show negative appreciation in the long term depends upon the severity of the recession that we see coming in the months to come.
Although there is no need to rush in to lock, consider that rates are nearing 2-year lows. If you need to close a loan in the near term, now is a great opportunity.