Today’s
Market Update–Friday Dec. 5th, 2008 4:11 pm ET
Current
Trend Direction: Bond Prices Higher
/ Mortgage Rate’s Lower
Current
Price of FNMA 5.50% Bond - 101.41, -41
The
30 Year Fixed Rate is 5.00% APR 5.116%
The
30 Year Jumbo Fixed Rate is 6.20% APR
6.307%
5/1
Jumbo Arm is 5.25%, APR 4.812%.
Markets
were surprised this morning with a worse than expected Jobs Report with a
loss of 533,000 jobs, the biggest loss in 35 years. The unemployment rate
ticked up to 6.7%, the highest since October 1993.
Mortgage
bonds were bouncing all over the place this morning and now are at the worse
levels of the day. So there most likely will be a re-price of mortgage rates
for the worst before the day is out.
Mortgage
rates are Volatile. But what’s with all the late afternoon re-pricing
for the worse?
Investors
will change prices for any number of reasons. No one denies that the market
has been volatile as of late, both overnight and during the day, due to
events, which impact rates.
So if
rates drop, and suddenly there is a rush to lock, investors may back off
pricing to slow things down, thereby also increasing their margins.
Conversely, if locks are slow, even if rates have not moved, companies may
change prices reflecting a reduction in their margins in order to spur locks.
Our
position remains lock rates to protect yourself and
float down when the market improves.
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