Mortgage rates have jumped 0.375% since the first week in January! The drop in mortgage backed bonds and 10 year treasuries followed an agreement on the “Fiscal Cliff” and have continued that trend since influenced by the stock market approaching all time highs. Is this a permanent change in rates or should we expect a bounce? It seems to me that the investors are working hard to find good news and not paying as much attention to negative factors. Yesterday, uncertainty was introduced into the Eurpoean markets with no clear winner in the Italian elections. It was a trigger that may at least help mortgage rates a bit. One day is not a trend, and I do expect we are on a gradual rise in rates overall. I do expect wholesale lenders to look closer at margins and perhaps mitigate some of the rate increases over the past few weeks. Most have geared up teams to handle increased volume and will want to make sure those folks are busy. Getting started with a loan makes the most sense and then float, looking for an opportunity to lock a rate that meet your needs.
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