Stay Tuned for GDP we are predicting that Colorado Mortgage rates will drop
I am predicting that the Economic Reports tomorrow will report GDP and Chicago PMI at or below expectations. These reports if my projections are accurate will cause Colorado Mortgage Rates to drop below the current pricing floor. This drop will allow us to secure our rate of 5.75%. This will also open up the door for risk takers to drop below 5.75% over time. We saw some continued improvements with Colorado Mortgage rates throughout the day, but much of the gain saw this morning was lost again by this afternoon. The late day loss was due to investors concern about what these two economic reports will actually say. With everything we have seen in the market so far, I cannot imagine these reports showing any type of improvement in the market. The problem is where investors have set the bar. The bar continues to show expectations far below normal ranges. Basically the market expects bad data. If the numbers come in at or below expectations, investors will move to buy Mortgage Backed Securities. This in return will improve Colorado Mortgage Rates.
The only other movement we will see in Colorado Mortgage Rates will be the markets interpretation on the FOMC (Federal Open Market Committee) meeting. The FOMC will release a variety of statements indicating their plan to stimulate the economy. The FOMC will be expecting another .25% decrease in short term interest rates. Interest rate decreases help the economy, but tend to be bad for mortgage backed securities. When Short term interest rates are decreased, investors begin to be concerned with inflation, causing negative ripples in the Mortgage Backed Securities market. With this said we will continue our FLOAT recommendation until tomorrow. We are still projecting a decrease in Colorado Mortgage rates through the week. Though the interpretation on what will be said by FOMC members can impact rates negatively, we just don’t see that happening tomorrow. Inflation is what we need to watch for. As each Member of the FOMC board begins to leak information we will all be keeping our ears open for inflation talk. If the talk is light, Colorado Mortgage Rates will improve. If for some reason great concern is raised for inflation by the board we will need to prepare for an immediate lock, as rates will certainly rise. Negative inflation news will send Colorado Mortgage Rates back into an uphill climb. It is up for interpretation, but if the FOMC does anything surprising the market will react negatively. We can just about get you 5.75% and expect that to be a reality tomorrow. So far we are implementing another FLOAT recommendation because of how close we are to 5.75%. LOCKING in the next couple of days may take the risk out of the market but floating for 10 days may get us under the 5.75% we have been so set on breaking through. Stay tuned and remember to call me for your Colorado Mortgage questions.
Tags: Colorado Mortgage, Mortgage Backed Securities, Mortgage Rates, Rates
