21 Apr Safe play would be to lock
After a couple of rough days, mortgage bonds are attempting to stabilize. With stocks currently battling a multi-layer ceiling of resistance, bonds are awaiting the outcome of this battle to see which way they will be heading. If stocks can muster the strength to break higher, we can expect bond prices to fall, adding upward pressure to mortgage interest rates. So far today, there has been very little economic or political news to influence the markets in either direction. Hopefully bonds can at least hold their ground as we await next week’s potential market moving news.
Tight inventory combined with high demand continues to pressure home prices higher. The median existing home price increased at an annualized rate of 6.8% in the month of March. If new listings open up in our local market, we can expect to see prices continue to climb higher throughout the strong housing months of summer. With mortgage interest rates remaining favorable, it’s likely that we will see a high level of transactions closing in the near term.
With bond prices stabilizing, there is no immediate need to rush to lock. However, with the 10 Year Treasury Note yield likely to move towards the 2.31% level in the days or weeks to come, there is also little incentive to float. If you aren’t much of a gambler, the safe play is to lock.