Mortgage Rates Volatile

The market is still trying to find its equilibrium, which continues to inject volatility into the equities and bond markets. Although, the market volatility index is starting to march steadily downward there are still lots of sharp reversal patterns in daily trading. Some of the major effects over the next few weeks will be the unwinding of weak positions by hedge funds, Fannie and Freddie debt sell offs, and repositioning into corporate debt with higher yields and equal risk due to government intervention. Over the long-term that is likely to mortgage rates up. However, for now volatility is the only correct read on mortgage rates.