MORTGAGE WATCH 02/25/22

Mortgage Rates are worse since last Friday as MBS (mortgage bonds continue to sell-off).  There was some hope/optimism that Russia’s military invasion of Ukraine would create a significant flight to qualify and the stock market would sell-off due to the uncertainty war brings to geopolitical risks, additional commodity inflation, and overall economic uncertainty.  Add to this narrative is that Fed Chairman Powell is set to rate the Fed Funds rate next week by 12-50 basis points.

Yesterday, the stock market was crushed at the opening by 800 points, but rallied into the close to end up in the green.  Example: the tech heavy NASDAQ was down over 3%, but ended up closing over 3%, and 6%+ move in ONE DAY!  Mortgage Rate and Treasury Yields saw much of the same, with yields/rates down significantly at the open, but then rallied to close higher than the previous days close….market experts, bond traders, and yours truly all said the same thing….

Look (below) at yesterday’s 10yr Treasury Yield opened at 1.862% and this morning opened at 2.003%.  This kind of move signifies extreme economic optimism which I just do not see in the face of the Fed tightening policy.­

 

 

 

 

 

 

 

 

 

This type of WILD volatility makes no logical sense.  How can investor take risk off the table with such uncertainty right in front of us?

That being said the only prudent thing to do is take your lumps and lock as soon as escrow opens!

Bottom Line: The dominant trend is toward higher rates as the market continues to reprice Fed policy expectations.  There could be shorter-term corrections, but attempting to time those movement is a gamble I cannot endorse.  Below are today’s lockable rates:

 

About the Author

Tim Morissette, also known in the community as Mr. Foothill Ranch, offers over 43 years of real estate experience which has given him an established reputation and unmatched market knowledge. He is joined by his wife, Michele and son Matt, as they continue to offer personal service with an emphasis on achieving his clients’ real estate goals.  This unique combination of traits has led to his proven track record of referral and repeat business. This can be witnessed by the trust of homeowners in Foothill Ranch where he has sold twice as many homes and represented three times more buyers than the next-leading real estate agent for the last 23 years.

As residents of Foothill Ranch since 1994, Tim and Michele are actively involved in the community by fundraising for Foothill Ranch Library, Make-a-Wish Foundation, Cancer Society, Homes for Habitat, Relay for Life, South County Outreach, and the local church and schools. Tim enjoys sponsoring community-wide garage sales, as well as sponsors Paper Shredding and E-Waste Recycling events twice a year.

Tim and Michele are dedicated to their family of four sons, daughter-in-laws, and grandchildren. As a family, they enjoy many outdoor activities which include camping, spearfishing, mountain climbing and exploring the miles of hiking and equestrian trails in Foothill Ranch and the Whiting Ranch Wilderness Park. Tim and his sons are also avid snowboarders and enjoy mountain biking and lobster diving. Family is a top priority in the Morissette household. They look forward to helping more families achieve their dreams of homeownership.