The Early Bird Gets the Worm

Markets are all over the place with the US stock market coming out strong only to lose steam and drop back into the red.  This bi-polar market is causing a great deal of panic for mortgage consumers who wanted to float their interest rate in hopes of rates falling even further.  This strategy has so far proven to be the wrong path, as rates have actually been moving higher.  This is a result of massive volatility in the markets and an over-capacity mortgage market that is raising rates at the top end of the chain to help try to slow the flow back down to a reasonable level.  The ones who locked early have so far been the beneficiaries, with a lot of them already closed and enjoying their new, low interest rate.

The 10-Year treasury Note yield has more than doubled since its low yesterday, with the current yield sitting at 0.65%.  When you consider a rate more than doubling in one day, you realize just how quickly opportunities can leave us.  Although mortgage interest rates aren’t directly tied to the 10-Year, they generally track in the same direction.  With the 10-Year on a sharp path higher, mortgage bonds are following suite.  However, with mortgage interest rates still very low, it remains a great time to lock in a mortgage interest rate.

Considering the massive volatility, we have a locking bias.