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Predicting Mortgage Rates Into the New Year

Welcome to Monday Mortgage Call, a weekly prognosis by Boston mortgage broker Brian Cavanaugh of where the all-important lending rates might be headed.

Overall, I believe we saw an important move in bonds Friday morning that could be a good sign for mortgage shoppers (an early Christmas gift!). As predicted, the 10-year Treasury Note yield finally hit 2.95 percent Friday, before moving away and closing at 2.89 percent. It appeared that the 2.9 – 2.95 percent levels were important in predicting mortgage rate direction and needed to be hit before we could expect a noticeable downward move in yields and rates.

With the next two weeks, including trading holidays, we cannot necessarily rely on movement on some of those days to be an accurate reflection of longer-term trends. We will, however, be watching trading closely for any sign of concern that would alter that prediction. Stay tuned for further updates on rate direction. I think rates could go down a bit after New Year's!

As for whether you should lock in an interest rate now, I would:

LOCK if your closing was taking place within seven days…

LOCK if your closing was taking place between eight and 20 days…

FLOAT if your closing was taking place between 21 and 60 days…

FLOAT if your closing was taking place over 60 days from now…
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