Market Update

Friday, July 31, 2015

What's going on in the market?Month-end buying and technical factors seem to be driving mortgage bond prices up toward their 100-day moving average.  We've been warning of a potential decline from these lofty levels because the last two times bond prices traded at these levels, they quickly declined and mortgage rates went up by 0.25% within a week's time.  Like any child that defies the rules when given an opportunity, the market seems to be testing its limits. 

Why does it matter?When mortgage bond prices go down, mortgage pricing gets worse.  When mortgage bond prices go up, mortgage pricing improves.

What should you do about it?Enjoy the uptick in bond prices as the market tests its limits.  But be prepared to lock your rate quickly if the market changes directions... especially because bond prices are near the upper end of their recent trading range.