Morning Market Update Stability amid Volatility

So what’s happening in the markets so far today?

• The 4th Quarter Gross Domestic Product was revised down from -3.8% to -6.2%.  Not fun.
• The government now owns close to 40% of Citibank.

Both of those have put considerable selling pressure on the stock market, especially the financial stocks, and we’re down to 11 year lows at this writing.  

To say that things are volatile would be an understatement.   However mortgage rates have remained a “non-event” this week.   We’re still at 5.25% for a 30 year refi, 5.0% for a 30 year purchase with 0 pts, a 720 credit score or better and an escrow account.

Why haven’t mortgage rates changed?  My assessment is essentially that the market is “on hold” waiting for a resolution to some of the issues that are plaguing the financial world.

My recommendation is still to lock all loans.   The upside risk for higher rates remains greater than the downside potential for lower rates.

I’ll keep in touch as events require.

February 27, 2009