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Rate Information 12/27/2011

This last week of the year in financial markets it always very slow.  In the stock market the last five days of the year are known as the Santa Claus rally because the market normally rallies on very light volume.   What this means to mortgage rates is they tend to slide up on very very light volume.  This is exactly what we are seeing today a very small move up on terribly low volume.

The amazing thing that I see in the charts is this tight range we are in has held for 2 months.  The 10 yr treasury chart below shows the tight range very clearly.  From Nov 1 to today the yield on the 10- yr has been between 2.15% and 1.85%.   Both in mid and late November I warned that I thought the range was being broken to the upside and I still believe that will happen.  Whenever this range is broken I would expect it to be violent as the longer those support lines hold the more tension  that will explode when they are finally broken.

Anyone with a mortgage should have at least have had a conversation about refinancing in the last 2 months and this next week should be another opportunity to do so.  Looking out to the new year there is great risk that rates could move up quickly mostly because we are currently at historical lows.   Please give us a call to see how today’s rates can save you money or give you peace of mind with a fixed rate.