Rate Update May 9, 2008

Mortgage rates are lower again this morning thanks to the rally in the bond market yesterday afternoon. However, the party may be short lived. Mortgage rates have benefitted from a weak stock market over the past couple days (on a side note, I recently blogged about the relationship between the stock market and mortgage rates which you can read by clicking this link). And although stocks are weak again this morning we expect that energy prices will begin to attract more attention.

Oil has now surpassed $126 per barrel which is likely to boost concerns over inflation. Energy prices impact the entire economy so as oil prices rise producers will try to pass the higher costs through to consumers.
When consumer prices rise mortgage rates will follow. We’ll keep an eye on oil prices but for the near-term we’re going to recommend that our clients lock their rates today.

Current Outlook: locking