Unzipped Mortgage Rates Report: September 25, 2008

We are advising clients to delay mortgage rate locks until the Bailout hearings are over.  That could change in a New York minute so keep checking our mortgage rates report daily.  We could change if the mortgage bond markets start reacting to an expected bailout plan early.

The economic data suggest that we are in a full-blown recession.  While that isn’t a good sign, it’s positive for interest rates.  Fed Chairman, Bernanke, may cut interest rates again:

Federal Reserve Chairman Ben S. Bernanke moved closer to cutting interest rates, signaling that risks to U.S. growth are greater than policy makers saw them just last week.

The “intensification” of the financial crisis in recent weeks is curbing Americans’ access to borrowing, making the outlook for consumer spending “sluggish at best,” Bernanke told lawmakers in Washington yesterday. While he noted that risks to inflation remain, the Fed chief’s testimony focused on “grave threats” to the banking system.

An expected bailout combined with the increased probability of a Fed rate cut compels us to remain positive but vigilant about lower mortgage rates.  Sit tight for now.

September 25, 2008