Rates Hold

It has been a wild ride if you've been keeping a close eye on interest rates. Last week the fate of Greece was still in question raising questions about the fate of the rest of Europe brought interest rates down to the lowest levels we have seen all year, but the following day, the markets recovered, bring rates back up slightly. Now with Greece the happy recipient of close to 1 trillion dollars - that's 1,000,000,000,000 - the markets have returned, at least for the time being, to their status quo - or so it would seem.

The long term markets are in fact supporting higher trading levels then they have recently. Why? Clearly this due to investor apprehension. The Greek bailout, my have stopped the riots, but it's a band aid, and we needed stitches.

Hence the new support levels in our market. Below is a snapshot of our current market. It is important to understand high points on this green graph represent low interest rates (there is more money in the market so the cost to borrow is reduced). Despite the recent fall, over all we are up in the year which has led to lower interest rates for those looking to refinance or purchase a new home.
This graph is a short term two day snapshot of our market... the point of this graph is to demonstrate just how volatile our market is right now. Below you will see a one month graph of the same note being traded which represents the climb we have made leading to the lower interest rates. Will this trend continue? We sure hope so, but realistically other market indicators suggest this is a bubble and the true trend is downward leading interest rates up.
Why? Look at the state of these agencies... Fannie Mae has asked for another 9 billion dollars along with Freddie Mac, also looking for 9 billion from our government. This burden suggests an inherent weakness in the MBS market which if investors begin to question will start pulling out bringing rates up. Couple this with the concern over inflation, and it's clear these low rates are not sustainable. The lesson. Now would be the time to lock in your rate.