October Opens with Lowest Rates Since Spring
October opened with some wild activity in the mortgage market. With the introduction of European quantitative easing, investors have been moving money to take advantage of European rates, and domestic rates have been feeling the benefits. On Friday, the average conventional thirty-year, fixed-rate mortgage quote plummeted. Almost all lenders opened the day offering the lowest levels we have seen in over five months. Unfortunately, the afternoon saw a substantial reversal in the bond markets that most affect mortgage rates, increasing the chance of rates shooting upward again.
One of the big factors at play currently is the recent September jobs report, which came in slightly weaker than was expected. This weak activity promises to call a Fed rate hike into question, and deter any general economic growth. It is difficult for long-term rates to go up significantly without a positive growth outlook.
In the near-term, we can still expect some volatility in mortgage rates. Anybody not prepared to deal with this volatility would be well-advised to lock into the current five-month lows.
