Sell Off...

What goes up must come down is the unfortunate truth this morning. The mortgage backed securities market is in the midst of a sell off. Currently down 7 ticks on the day, there is concern that this sell off may have legs, and continue - becoming something more serious.... leading to higher rates.
The treasury market is our best indicator at this point in time. Currently the 10 year treasury is producing a yield that is still under 3.00%. Should the yield rise back above 3.000% (which is definitely possible) this sell off will continue.

Yes this will mean higher interest rates, but we do have support in our market despite this bad news. If you look at our market, and current trading patterns it is clear that it will take a substantial headline to curb the long term investors recent craze for long term bond products. Inflation would do it.... but this does not seem to be a real concern, at least in our immediate markets.

All things considered, if you are looking at closing inside 30 days, locking right now may be the smart decision. If you are more flexible on your closing deadline and open to risk, you may want to ride out the week, and see where we are on Monday. I risky play, but something I am be no means against. With proper market assessment, floating into a shorter lock period may prove to be the right play. Evaluate your tolerance to risk before answering this question about locking or floating.