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

Good Afternoon,

My recommendation to not lock through the end of the week was correct. The 10-year bond yield plummeted this morning by almost .10%, which caused mortgage interest rates to ease back down again. As I have also mentioned, the ultimate trend is that rates are consistently going up, but we have been seeing little patches of opportunities revealing themselves during this upward process. The key for consumers is to pay attention to what’s happening and then jumping on the opportunities that present themselves quickly, because you can rest assured that the opportunities will not last long.

Here is what’s going on:

The existing home sales in June looked nothing like the slight rebound we saw in May according to The National Association of Realtors. They declined by 2.6%, which was much worse than the 1% drop that was expected. Along with this news, Ford Motor Co. and Dow Chemical Co. both showed steep losses during the second quarter. This was good news for the bond market today and after the news from the Fed that more information is needed to determine a move to combat inflation, investors felt more comfortable with playing the bond market for the time being. The last piece of information, but certainly not least, was the huge jump of jobless claims last month. The 400,000 mark has been broken. As a result, mortgage interest rates slightly declined again.

Simply Put: Existing Home Sales dipped much more than expected. More than 400,000 new jobless claims have been reported and another two major corporations showed worse than expected quarterly earnings. This stimulated investors to cash in the stock market investments and place the money into bonds, which helped mortgage interest rates this morning. I would expect rates to creep back up again by next week.

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

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