Rates Hold... For Now

Rates are holding this morning at highs that have produced interest rates that are as low as they have ever been. Currently conforming 30 year fixed rates: 4.375% is coming at an upfront cost of .071, or 4.5% is paying rebate or nearly half a point (.463) for prime borrowers putting at least 20% down. Will these rates hold? They are holding for now, but the support for these rates is not very substantial.

A strong headline in short term markets, a surge in treasury yields (which we may see this week due to more auctions), Europe stabilizing... there is significant risk associated with our market right now, and the odds are stacked against the market posting any more gains. There is many ways the market can move against us at this point in time. We should be prepared for a sell off and higher rates at any point in time.

With that said on Friday I heard one bond analyst discussing the bond market. His statement caught me off guard and is worth sharing. He stated that the 10 year treasury yield could go as low as 2.500 to 2.000 percent. Although I do not believe this to be true the point is some analysts believe the treasury yield can move lower, and if it does there is a good chance the mortgage backed securities market will improve as well leading to even better rates. This is a gut shot play. I would wait for anything - lock if you're happy with your rate, if they move lower look to renegotiate before closing.

Rates are awesome right now... take advantage.