Welcome to Monday Tuesday Mortgage Call, a weekly prognosis by Boston mortgage broker Brian Cavanaugh of where the all-important lending rates might be headed.
The stock and bond markets were closed Monday in observance of the Martin Luther King Jr. holiday.
Overall, it appears that we may have a fairly quiet week ahead of us in the mortgage market. That is unless we see something drastic happen in stocks. The benchmark 10-year Treasury Note yield closed last week at 2.82 percent after moving back above 2.9 percent mid-week. That means we saw rates bounce around because mortgage rates trend with bond yields.
I see a relatively minor level of resistance at 2.8 percent that could prevent bonds from improving too much more without something of significance to drive trading. With an extremely light week in terms of economic data and other events that traditionally affect bonds and mortgage rates, I believe it could be difficult for the 10-year yield to drop below that level and remain there this week.
Therefore, if you're closing in the very near future and you still have not locked in a rate, it may be an opportune time to do so. I am holding the short and mid-term lock recommendations on that theory, but am prepared to shift to a less conservative position if the major stocks indexes start to move lower as that could be the catalyst needed to push bond yields below that level.
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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