Rate Update March 20, 2009
Fixed Mortgage Rates are higher than yesterday.
The party didn’t last long in the Bond trading pits. Yesterday I spoke about how the threat of inflation…even the idea of inflation from recent announcements can be a big party pooper on Bonds; that is exactly what we are seeing now. Yesterday Mortgage Backed Securities started to sell off at the exact point that they did when bonds made a run in January and lenders were very quick (and still up to it this morning) to increase interest rates.
I think that it is very important to remember that the purchase of Mortgage Backed Securities by Fed (they have purchased $235 Billion since November) will only help to keep interest rates low, but it will not force rates down to any magical number.
Current Outlook: Bias towards locking