So....you read last week's mortgage rate predictions and I finished with "are you feeling lucky?"

If you were feeling lucky or hadn't found a home yet, the market dealt you improvement in conventional, FHA, and VA loans once again.  That's four weeks in a row and at their lowest levels since the holidays.

Rates should not be at today's 4.875-5.000% range.  Global events have taken over the primary role of driving U.S. mortgage rates. Mortgage rates went lower again last week not because they should, but because our bad economy is less bad than the world's awful economy.

Domestically:  Corporate earnings are improving, housing is showing stability and key elements of the economy are strengthening.  Even the Federal Reserve acknowledges this. What should have happened is that money would pull out of mortgage bonds, mortgage rates would jump, and your 401(k) would have taken a nice tick up.  None of that happened.

Globally:  China is in trouble and tightened their monetary policy.  If you don't read John Mauldin, start.  His most recent newsletter on the mess of the EU, the Euro, Greece, Spain, Portugal, and Ireland should be broadcast on CNN and it would end any complaining about our economy.  It's actually really good here.

Because mortgage bonds are backed by U.S. government entities, the debt is considered to be ultra-safe.

Mortgage Rate Predictions - This Week

Here's what's moving rates this week:  News.  That's all it is. There are very few economic reports other than Retail Sales on Thursday.  The biggest news that will influence mortgage rates this week will be from overseas and it will hit while we're all sleeping.  Expect volatility from day to day rather than intraday like we've been seeing lately.

We're within .125% of the magic 4.75% rate that seems to always trigger a massive sell-off.  Rates go lower if the EU looks like it is falling apart, rates go higher if the overseas economic news shows the slightest optimism.

If you're unsure of whether to lock or float a loan, send us a call or email and we're happy to talk through what's on your mind.