If your mortgage broker is telling you that rates have gotten worse, they're right.  We actually touched the worst point of the year early this morning, but have since pulled back.  We surmised last week that the end of July/beginning of August would either mark the beginning of a slow improvement for rates or the precipitous falling to worst levels of the year.  It wasn't really that sensational of an assumption as the markets have tended to do the same thing a majority of the time in the past. 

It looks like we have our answer as of last Friday and we are adding, albeit slightly, to the losses this morning. 

The Numbers

You are pretty much looking to be right around 6.5% today on a 30 year fixed assuming the best of the best scenarios. 

The News

• LEI (leading economic indicators)
• this report came out dead on with expectations.  There has been little to no market reaction on this. 
  
• Bank Of America Earnings,
• This came out better than expected which is helping stocks keep from reversing into negative territory this morning.  Many financial stocks are rallying.  Any other sector stocks rally would have more of a negative impact on mortgages, but any positivity in financial stocks adds a modicum of reassurance about the overall mortgage picture and decreases some of the more intense urges for investors to prefer treasury debt to mortgage debt.  but uncertainty remains until the Fannie and Freddie news have more time to play out.
• The rest of the week is light in terms of data.

The Call

    Ok, we may finally be nearing the bottom, but there is no way to know for sure.  It's a good sign, at least, to not the the same downward momentum we've seen in the past 3 sessions, not necessarily in that it means that we will make gains on the day, but at least that we COULD avoid the same level of carnage from the previous 3 sessions.

Also, we should consider that with as much downward momentum as we've seen, that lender's are pricing a bit higher than they probably need to be, so even no further changes in Mortgage Backed Securities today could lead to a slight improvement in rates.

Whatever the case, we either have a bit farther to fall before feeling the sand on the bottom of the mortgage ocean, or we can slowly but surely climb out of this mess.

LOCK / FLOAT: Ha!  What does it matter!?  Today's rates are the worst of the year.  Nowhere to go but up right?  Well, that's a dangerous assumption.  Some of you will be better served by taking the risk out of the market as you will always regret "floating when you should have locked" more than you'll regret "locking when you should have floated."  

Still, today looks like a floater and if we can even just hold onto this sideways momentum, we should see reprices for the better from some lenders.