Treasury Auction - rate drop?

There is supposed to be a treasury auction today, which could drive rates down. With poor or flat lined numbers that have been coming out, people could make a short term move into treasuries. This demand could push the yields down and cause rates to follow.

I'd be on the lookout for a small swing down. Anyone that's on the fence or has a loan in process that's not locked, should look to maybe lock. As I always say, no one can predict what the market will actually do and what the banks do based off this market (the current prices might already reflect what the banks think is going to happen). BUT, I'd bet on rates going in the red which is always nice even just a little bit.

As someone who will tell you, you're not going to hit rates at the bottom, this is one of those swings I'd jump on and let the chips fall where they may. If rates drop we'll have a week or so to capitalize so let's not waste it.

Call me 818 264-0999 to discuss any scenarios you may have.

Willie

Rate Drop??

Above is a 5 day snapshot of treasury yields. This used to be a good barometer of where the rates would go. 5 days ago was when the Fed said they where going to buy up assets over the next few months. The yield tanked and everyone called to see about this huge rate drop they heard about. As you can see, the yield when right back up and the low rates lasted no more than 24 hours.

Today, the same thing happened only later in the day. I can see rates being lower tomorrow and then going back up. I think gradually rates will come down slightly, but not overnight. The yield has been creeping up over the past few weeks but rates have stayed in the 5% range. Now that the yield is going down, I don't see why there would be a massive rate cut, since there wasn't one on the way up.

The main lesson to be learned is, what I've been preaching to so many, to get your loan in and let's get it going through processing. We can set a goal and when the rates hit that goal we are able to lock. Lenders are swamped and overloaded. From a time frame standpoint it's very hard to get loans closed in 30 days. If we can get the loan in, get it underwritten and then be ready to move when the rates do, we'll be much more successful than to wait until the rates get to where we want and then start the process.

As you can see, a rate might only be available for a moment or two.