Rate Update October 26, 2009

Mortgage rates are starting the week higher.

Here on ‘rate update’ we shifted our outlook to “locking” beginning on Friday when mortgage-backed bond prices dipped below important levels of support.

Looking ahead for the week it is another busy one.  In addition to reports regarding GDP, Personal Income, and the Fed’s favorite gauge of inflation (Personal Consumption Expenditure) the markets will digest a record $123 billion in treasury securities auctioned.  Investors will be watching the health of these auctions closely.

Technical trading suggests mortgage rates will likely be moving higher.  However, some analysts we like think mortgage rates have one more run lower.  The safe play is to lock in mortgage rates.

Current outlook: locking