01 October 2010 – For a week chock full of economic data, the trends this week generally matched those of the previous weeks. Early in the week, low numbers for consumer confidence brought rates to near record lows again for a short time, but this passed and positive news on consumer spending and unemployment numbers. For any action there is a reaction and this positive news was accompanied by a reaction that economic improvements could negatively shape Fed policy. Markets reacted with a 180-degree turn around and an easing of upward pressure on mortgage rates. While this did temper the increase, mortgage rates for Fannie Mae and Freddie Mac conforming loans did end up a slight bit.
WHAT DOES THIS MEAN TO YOU?
We are no doubt in the midst of a very volatile market. While maddening, this rewards procrastination. Because there consistently seems to be a recovery in rates to save those who did not begin their transaction, the psychology of the market becomes an ingrained wait and see approach. My best advice about this is that it works until it doesn’t. There will be a time when rates move up a bit, then a bit more, then a bit more and do not recover. So for the fence sitters out there, you are, for now, still in a pretty good position to take advantage of the rates. I would, however, say the window could close quickly, so decisiveness should find its way into your lexicon.
I am recommending that my clients closing in 15 days or less from today LOCK their rates. For those closing more than 15 days out, I would suggest FLOATING for now with a watchful eye on the markets for the best opportunity.

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