The Dow on Friday lost over 400 points and all the while; that's right you guessed it we had zero change in mortgage rates. This is quite disturbing as usually with a swing like we saw on Friday in the DOW we would have seen a big swing in mortgage rates (usually for the better). However, there was very little movement in MBS (Mortgage Backed Securities) and that scares me! Where were investors putting their money? Well I can tell you without reservation that it was Oil ($11 gain on Friday), Gold (also up over $23.00 on Friday) and more than likely (under the mattress) a money market account.
Mortgage Backed Securities have definitely lost their "glow". Investors are less likely to buy MBS when the value of the dollar continues to hurt, mortgage delinquencies continue to rise and financial firms who are having to continue to sell stock to raise capital in order to weather the storm. I believe in the long term rates will get better however my view on short and mid-term rates have definitely changed. Unfortunately for a person looking to purchase in the next 30 days they may be forced to bare the bad news of rising mortgage rates. Let's hope I'm wrong!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Monday, June 9, 2008
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