Rate Update for September 3, 2008
Mortgage rates are lower today.
In yesterday’s rate update we explained that we thought mortgage rates would first increase in response to lower oil prices (because of the stock market rally) and then decrease because of the anti-inflationary implications.
However, stocks could not sustain the rally yesterday which helped mortgage-backed bonds advance (leading to lower mortgage rates).
It is a relatively light day for economic news. For now we are going to remain in a neutral stance to see if rates can continue to move lower. However, bond prices are approaching an important ceiling of resistance as shown below so we need to be ready to lock.
Current Outlook: neutral