Mortgage Rates Operating in Unprecedented Environment

By:
Bill Rice | October 10, 2008
Mortgage rates are now officially operating in a historically unprecedented environment. This would trigger broad, cautious counsel to lock rates. Although we have seen steady downward pressure on mortgage rates throughout the week yesterday sparked an unusual effect in the bond markets. Traditionally, a decline in the equities market, particularly a large and rapid decline indicates a flight to the safety of the debt (bond) markets. This keeps investors money active and working while they sort things out and design a new strategy. However, yesterday we say rapid flow of money out of the equities and debt markets--indicating a flight to cash. Therefore, a close eye has to be focused on both markets with little benchmark or leading indicator to forecast mortgage rates. My current expectation is to see a trend towards increasing rates over the next 30 days as the US and global economic leaders continue to inject "solutions" to stabilize markets and financial institutions.

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National Rates

Loan Type Today
30 Year Fixed   5.62
15 Year Fixed   5.47
5/1 Adjustable   5.85

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