Last Week's Mortgage Rates Recap
Our stance last week to cautiously float proved to be correct. We ended the week about .500% better in rebate - that means on a $200k loan the consumer would get about $1,000 in lender credit towards closing costs, or may even have seen their rate improve by about .125% on a 30 year conventional fixed rate loan. Remember that this is an industry average, and may vary from lender to lender.

This Week's Mortgage Rates Forecast
Risks Favor: VERY CAUTIOUSLY FLOATING
The technical indicators this week show that Mortgage Backed Securities are hovering in overbought territory, meaning we may be poised for a market correction driving rates up a bit or pulling back that rebate we got last week. However, there is much that will be driven by news this week with continued talk and focus on the sequester and Europe.

This week for consumers who are 2 weeks and further from closing, we will continue to look to float, being ready to lock interest rates with any sign of rate deterioration. For consumers who are within 7-10 days of closing, locking is probably the safest measure because there will be no time to recover lost ground in the case of a deterioration. We will not likely see drastic interest rate movement, but we will probably see pricing fluxuation throughout the week.

BOTTOM LINE: This week, consumers should stay in close communication with their MLO and be ready to lock in their rates on signs of weakness, or ready to capitalize on rebate improvements if the market improves. Don't look for much of a true interest rate improvement though, the market doesn't look like it is quite ready to allow for that yet.