Happy Friday - I love short weeks. We've seen a fair amount of capitulation in the mortgage bond market this week as the economy continues to show weakness while a few economic data points did surprise and influence bond prices, oil is the major dictator right now. This morning, the CPI numbers were better than expected with the January Headline CPI MOM coming in at 0 vs. estimates of -.1 - certainly not blistering but better than expected like I said. Additionally, the core CPI MOM came in at .3 vs. expectations of .2. Core CPI YOY was 2.2 vs. estimates of 2.1. This is negative for bond prices but while bonds have retreated from this morning's highs, the sell-off could be worse if it weren't for oil being down 4.5%. Currently the FNMA benchmark bond is at 102.36, 36 basis points off the high and 10 basis below the 1st level of support. Yesterday the bond closed up 35 basis points.
Any day I don't write a blog post, you can get interest rate information by downloading my app (buyerZapp) which is available in the sidebar of my blog. It has a great mortgage calculator for buyers to see what their payment will be on homes they like. You can also set your alerts so that you will be notified when the market moves a given amount in one direction or the other. Additionally it has great links to current real estate news. Check it out and let me know what you think. As for my recommendation about locking / floating...I would lock. I believe there is still more risk to the down side than there is reward for a possible upside movement though it's also very possible that the trading range is very narrow since it is unlikely oil will go much lower or that we get strong enough economic data for bond traders to sell in a big way. The fact is that rates are great and locking now isn't a bad thing. Make it a great day and a better weekend. I'm available for any mortgage questions or pre-approvals over the weekend.
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