Well, yesterday for about 1 hour, rates were so good that you could hardly believe your eyes!!  You could get an FHA rate with no points for around 5.5%.  Then, before you could even get someone on the phone to lock a rate, the rates went up, up, up with an average total of 4 price changes for every bank during the day (and some banks just refusing to lock for the rest of the day)!  Every time you wanted to lock, you received notification that the rates had risen again and you had to wait for the new rates.  It was enough to make the loan specialists like me crawl under a rock!!!  The fun didn’t end there either, today the ride continued with further rate hikes and in the end, rates were worse than they were a few weeks ago. 

The reason for the recap is this.  Many of my clients would like to know how to tell, from the stock market updates, what rates are doing.  One VERY GENERAL rule of thumb is, if the stock market is having an especially good day, there is a good chance that the rates are having a bad day and vice versa.  Many factors contribute to this including the bond market and how money is moved back and forth.  However, the general rule is that the mortgage rates and stocks have an inverse relationship.  SO, is hope lost?

Of course not, 76% of all traders are still predicting another Fed rate cut and the rates are still incredibly good.  Those looking to purchase or refinance a home still have the chance to make their money go farther.  Also, part of the stimulus package agreed upon by our Washington leaders today includes raising the allowable loan limit for FHA loans and allowing Fannie Mae and Freddie Mac to purchase loans that, until now, have been considered too large or “Jumbo”. 

So, all in all there was a lot of mixed news this week.  As always, stay tuned for more and we will try to keep you informed!