Should I float? Should I lock? - Daily Update for Wednesday, March 19, 2008

Here are the daily thoughts on floating or locking if you are asked by your clients.

As always - consult your favorite mortgage professional who will be able to offer the best advice for YOUR unique situation.

.75% decrease! Wow. Who would of thought that the Fed would be dropping the target interest rates all the way down to 2.25%, i.e. the Prime Lending Rate is now 5.25%. The stock market went on a bender yesterday rising up 400+ points and as a result the bond market gave back 2/3's of its gains from the previous day.

No scheduled economic reports are due out today. Jobless Claims and a fed index will move the markets tomorrow. Today will be a reaction to how the stock market handles things.

Technically speaking - the FNMA 5.5% 30 year bond lost almost 90bps yesterday. It's currently in an overbought range and way above support levels. If stocks continue to improve today look for the bond and mortgage rates to worsen.

Until things settle down, I am still suggesting that one take advantage of nearly 2 1/2 year lows in interest rates and

Lock your interest rate.

Check out Should I float? Should I lock? & Reasons to Float or Lock