MORTGAGE RATES STILL IN A NARROW RANGE

As expected, mortgage rates continue to remain in a very narrow range of 4.875-5.15%
Factors keeping rates low: the stock market is now trading at levels not seen since 1997, wiping out over 10 year of gains. This triggers the flight to safety of buying treasury bonds. The markets are still trying to find that elusive bottom which is continually offset by news of tremendous losses from Citigroup and AIG.

Second, the Fed really wants to keep rates low to help home and business owners get the cheapest money available. He is buying the longer dated treasuries.

Factors which will eventually push rates higher: An incredible supply of bonds that the government needs to sell to finance all of their bailouts and deficits. Who is going to buy all of these bonds? China and Japan (who have bought our bonds for years) now have their own national problems. 30 year bonds which yield 3% or less are no longer attractive and are competing with corporate bonds.

Our belief is that volatility in the stock market may create a final bond rally BUT that we will see higher rates in time. Risk/ reward continues to favor locking in good rates when your need and the rates work together. No one has a crystal ball including me.

I will continue to advocate that waiting for the lowest rate may result in losing a great rate. Everyone should review their longterm financial needs and determine if their current mortgage meets those needs while rates remain at generational lows.