The Mortgage Man

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Mortgage Bonds Have A Rough Week

Mortgage rates have have a rough week, here is a wrap up of the weeks financial news.

The Financial Markets Weekly Wrap Up

Yet another exciting week in the bond market, and many are left scratching their heads as to where we go next.  This was a busy week for financial news, and when there are reports coming out, the markets lie with baited breath for guidance on how to react.  This week that reaction was “Run for the hills!”.

Tuesday May 27th

The Consumer Confidence report came out lower than expected, and the New Home Sales report came back higher than expected.  Overall it was a good news bad news day, and there was not much movement in the markets.  Although they did head south overall for the week.

Wednesday May 28th

The Durable Good report came out slightly better than expectations, but fears of inflation from comments made by the federal reserve led bonds to drop below the 25day, 50 day and 100 day moving averages.

Thursday May 29th

Yesterday, the markets reacted negatively to the Gross Domestic Product report and the Jobless claims report and drove mortgage bonds below the 200 day moving average.  This was significant because only 3 times in the last 3 years have bonds made such a decisive move across the 200 day moving average.

Friday May 30th

Today, bonds traded up slightly from yesterday, but still have not come up above the 200 day moving average.  This is particularly concerning because a quick rebound would have been less damaging to the market as a whole.  The longer they stay below the 200 day moving average, the more likely that rates are not just up on a short term basis, but rather, they may be trending that way long term.

Overall, it has been a bad week for those in the mortgage industry, and those who are shopping for a mortgage loan right now.  Based on the shear uncertainty in the market, I would recommend locking your rate to save from potential losses on your purchase loan.  If you are refinancing, make sure that you have locked to maintain the benefit of the refinance to begin with.

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