Rates Continue to Improve

It's a picture day...

The end of last week left us questioning what was going to happen this morning as markets opened and investors had time to think about their portfolios over the weekend. Opening bell clearly demonstrated that they determined long term markets are the smart investment right now. Below is a five day snapshot of our market, which demonstrates the gains we are already enjoying this morning.


This move does support the new range that the market is currently trying to establish, and is broken down in detail in my Friday post. Here is a graph showing the last month of trading... which as you can see has brought the MBS market to recent highs.


What the above graph does not highlight is the fact that these recent gains have pushed us to highs of the year (keep in mind high points on these graphs lead to lower interest rates for borrowers). Below you will find a 6 month graph breaking down our market over 2010.


If you look closely or enlarge this graph you will see two red arrows at the end of March beginning of April. This quick downtrend was due to the Fed leaving the Mortgage Backed Securities market after infusing 1.25 trillion over a 2 year period.

Needless to say, today is a day we can all enjoy with rates reaching lows of the year. However I have included these red arrows to highlight just how quickly the market can correct bringing rates back up. Despite these strong arrows leading up on all of these graphs, a shift in the economy could curb these gains, and bring our market down.

I am recommending locking right now. A bird in the hand after all... and it has been my experience that if borrowers get a taste of a low rate only to watch rates climb, they try to wait it out for that low rate to return. I cannot imagine a better sales point than rates being at their lows of the year.