In the US Army smoking was not discouraged until very recently. In fact for decades military MREs (Meals Ready to Eat) included a pack of cigarettes. A common expression when a commanding officer wanted to have his troops relax for a few minutes was “smoke’m if you got’em”, meaning take a quick break. I have altered that expression this morning to use as a call to action rather than as a call to relax. Put simply: if you need a mortgage loan for a home purchase or refinance you would be wise to lock the interest rate as soon as possible.
Over the last week current mortgage rates have been heading higher as evidence of unexpected strength in the US economy emerged along with progress by European leaders relative to their debt and banking crisis. Over this week the US stock market has rallied substantially as investors came to believe that prospects for a new recession had waned. Mortgage rates might have gone even higher had yesterday not been a holiday for the bond markets given the 330 point gain in the stock market.
Mortgage rates appear poised to open at, or slightly higher than, their close from last Friday. Frankly this is a gift, given yesterday’s equity market move. With no economic data released today or tomorrow, any movement in rates will be tied to statements of leaders in the US or Europe.
In the US the minutes of the past Federal Reserve Open Market Committee will be released this afternoon and searched for signs of new policies. In Europe today comments by officials with the “Troika”, the group of European financial regulators put together to evaluate Greece’s progress meeting its obligations to receive bailout funds have indicated that Greece will likely be approved to receive its next round of funding.
Another factor that could move rates this week is the beginning of the Fall corporate earnings season which commences after the markets close today. Most analysts are expected US corporations to announce strong earnings on average across the various business sectors. If this proves to be true—it is yet another reason to “lock’em if you got’em”!
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