After Trump's victory on Tuesday, the stock markets have surged and while the gains this morning aren't nearly as big as they were last Wednesday through Friday, the sell-off in the mortgage bond market is about as big as last Wednesday. In my last post I recommended locking but did think that there was a possibility of traders buying since the RSI was oversold then. It remains oversold and even if the Fed decides to raise rates in December, at the current price of 100.19 the FNMA benchmark bond is oversold since it is down 264 basis points since the open at 102.83 on Wednesday (I should note that about 32 basis points of this was due to the monthly bond roll-over). This translates into an increase in rate of about .5-.625%. This is massive and is oversold by probably 150 basis points or more...unless they think the Fed might increase rates by more than .25% but that is not warranted based on the economic data.
While nobody has a crystal ball and it's hard to tell if bonds will continue to sell off, logic says that traders will see a buying opportunity sooner rather than later. My recommendation would be to float - you may have to be patient which means you may need some time. If you are closing within 15 days, you may not have the time. Based on the prognostications of what the Fed has hinted at, the math says the market is oversold. Contact me if I can help in any way, including current updates to how mortgage bonds are doing: 801-893-1737, 702-812-1214 or firstname.lastname@example.org. I'd love to help you or a client / friend with a mortgage for a purchase of your home or any other mortgage need. Keep a close eye on the mortgage bond market so that you can lock at a good time if traders start buying again.