30 July 2010 – As I look back over this and the last few weeks from a rate perspective, I think of the French saying “plus ça change, plus c’est la même chose.” It says that the more things change, the more they stay the same and this sentiment definitely applies for mortgage rates. In short, rates remained extremely low throughout the week with no discernable change.

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FORECLOSURES UP AND APPLICATIONS DOWN

Economic data remained a bit grim. Although sounding optimistic, employment data was once again disappointing. Rolls dropped by a couple hundred thousand, but the number of Americans receiving benefits is still around 3.66 million and many have been receiving them for 2 or more years. This problem continues to drag other aspects of the economy down with it. Foreclosure rates, for example, are continuing to rise in most metro areas. Additionally, refinances are not tracking with the low rates as borrowers with limited means and lower home values are less and less able to take full advantage of the phenomenally low cost of money. Home values, however, have begun a moderate improvement with the S&P/Case-Shiller® 20-city index experienced price showing appreciation over the 12-months ending in May for 13 metropolitan areas.

LOCK IN SHORT-TERM, FLOAT IF FATHER OUT

I am recommending my clients lock in the short-term as the risk definitely outweigh the potential of securing a better rate. Fifteen or more days out, however, I do see a benefit in floating. I give this advice with the caveat that the markets are losing some momentum and the best rate will go to the borrower with the best timing.