Mortgage Rate Update April 23, 2015

Although mortgage note rates are unchanged today the accompanying closing costs have worsened slightly this week.

As I have been writing for the past couple weeks interest rates are trading sideways within a tight range.  Currently, the pricing on mortgage rates are at the worst levels since the middle of March (on a historical scale rates are still very attractive).  This pattern is evident by looking at the yield on the US 10-year treasury yield, which mortgage rates loosely correlate with, since St. Patrick’s Day:

As you can see the yield has drifted lower then higher then lower then higher, etc. within a well defined range.  Should this pattern continue then we’d expect pricing on rates to improve over the course of the next few days in which case it makes sense to float.

However, should this pattern break it would likely mean that interest rates continue to worsen so this position is a risk.  For now I will recommend a floating position and should yields on the US 10 year note worsen to 2.00% or higher we’ll need to lock.

Current Outlook: floating