Mortgage Rates Sell Off and Bounce Back

Mortgage rate predictions have become a game of chance.  The world does not have a normal economy right now and we're seeing that play out inside of mortgage rates. 

For the most part, a weak dollar is bad.  For the past few weeks, it hasn't been as we've seen the best all-time mortgage rates.  For the most part, 10% unemployment is high.  Friday, it was well-received by the stock market and caused mortgage rates to jump.

Last week saw a large sell-off.  Mortgage bonds had been overbought for some time and needed a correction.  In total, last week saw anywhere from .25-.50% jump depending on the loan program.  We are seeing a rally today that has taken back about a third of what was lost last week. 

We're still sitting within .25-.375% of the best rates of all-time and .5% lower than where we were in mid-October.  Rates are low, but expect talk of economic recovery to chip away at them.

PPI helps support mortgage rates rally

The Producer Price Index came in lower than expected, good news for mortgage rates.

Chicago mortgage rates have dipped almost a full .5% since jumping last month.  We're in the middle of a fourth consecutive week of improved rates and we're now back to the lows of 5 weeks ago. 

What's interesting about this now is that it is occurring with the new Fannie Mae and Freddie Mac refinance programs more widely available.  There should be additional homeowners able to refinance compared to the rate rallies of earlier this year.