Morning Market Update

Well, here we are on Tuesday and it was a very ugly Monday in the stock market reaching levels that we haven’t seen since 1997.

So what does that mean for mortgage rates?  Frankly not very much.   Let me explain my theory:

• People are concerned about the value of their investments.  I heard an analyst on CNBC yesterday refer to it yesterday as “capital preservation” mode (aka - I want my money back).   This is pulling money out of the stock market and into the treasury market.
• Also in the capital preservation mode, many in the market are running away from mortgage backed securities.  So while the stock and Treasury market have been volatile, to say the least, mortgage rates have remained quite steady.

We’re still at 5.25% on a 30 year fixed refi and 5.0% on a 30 year fixed purchase both under $417,000 with 0 pts, a credit score of 720 or higher and an escrow account.

Recommendations remain to lock all loans.   It appears for now that part of the market moves yesterday are getting “unwound” but the volatility remains and I’m still a believer that the risks remain higher to the upside than the downside.

Stay tuned.