Mortgage Rate Forecast for April 18th - 22nd 2011

With traders pricing in a 64.5% chance that Greece will default on it's issued debt within 5 years, money has been flowing into the safe haven of U.S. Bonds. This had caused Mortgage Backed Securities to move slightly higher near the end of last week, but has also caused the Mortgage Backed Securities to battle a tough line of resistance at the 100 day moving average. A line of resistance that the Mortgage Backed Securities has fought and lost numerous times recently.

                             

Short term the outlook is for stable or slight improving rates, while the long term outlook remains in favor of rising rates. When rates do finally make the turn around and head higher, it will happen very quickly. At this time it's best to advise your buyers to get off the fence and take advantage of what are still historically low rates.

Do not forget that the markets will close at 2:00 p.m. in Thursday and will be closed all day Friday, so any action that is going to take place in the Mortgage Backed Securities markets will do so by Wednesday.

It is our hope everyone has a safe holiday weekend.

Michael Liles NMLS# 91257

Director of Secondary Marketing

Advantage Loans, Inc.

Mortgage Rate Forecast for April 11th - 15th

Interest Rate Forecast for March 21st-25th 2011

It appears the key word this week is going to be “INFLATION”.  With rising inflation overseas,  especially in China, and last week’s economic reports  in the United States showing better than expected, it appears inflation is going to get here sooner rather than later.   The effect will be investors pulling their money out of the Mortgage Backed Securities and Treasuries to place the funds into the equity markets.  You have to remember in the mortgage world - inflation is our worst enemy - it erodes the value of those fixed return securities. 

This combined with easing tensions in Libya , investors are rapidly pulling their money from the safe haven of the bonds to place in the stock market where a greater return is anticipated.

This leads us to believe that we will see a week of volatility and a trend toward higher rates.

As always if you have questions regarding this release, please do not hesitate to contact the loan officer that sent you this link.

Michael Liles - NMLS 91257

Director of Secondary Marketing

Advantage Loans, Inc.