Understanding Mortgage Rates | dripp inc | Home Equity | Refinancing and Remortgage Guide

Good Afternoon,

Hold on to your seats because the 10-year bond yield is already up by 0.071% and going. Last week’s stock market stimulation seems to be continuing again due to another decline in oil prices and a push by positive quarterly earnings from corporations like Apple Inc. The result, mortgage interest rates are worsening again!

Here is what’s going on:

There were actually a lot of upbeat quarterly earnings today, which stimulated another Wall Street rally. By the looks of things, mortgage interest rates are going to continue rising because, as we’ve said before, the appearance of an improving economy influences investors to place their money into stocks instead of bonds. Since the 10-year bond is the benchmark for mortgage rates, we undoubtedly see them increase as more and more money is taken out of the bond market and placed into stocks. Investors invest to make money, so when good news comes out about corporations they jump on the money train to capture whatever profits they can. However, I will not be surprised if we see another stock sell-off later this week or early next, as we did this past Monday.

Today, we are also waiting for the Fed’s Beige book release at 2pm discussing the economy by region. I am not expecting any surprises, but I will update you either way.

Simply Put: Expect rates to continue to rise through the end of the week or early next week. There have been enough positive, corporate earning reports to cause the dispatch of money from an army of investors into the market this morning pushing mortgage rates up. Keep your eye out for more news through the end of the week. Because of this dramatic stir I would suggest waiting a few days more before you lock in a rate, or if you are worried about things getting worse, mortgage brokers can lock you in to be safe and if rates improve you can request a float down.

Please e-mail me at Savvas@drippinc.com with any questions or to be added to my mailing list.

Should I lock if I’m closing within:
- 15 days? NO
- 30 days? NO
- 45 days? NO
- 60 days? NO