San Diego Mortgage Rates Report- September 21, 2007

San Diego mortgage applicants and home buyers have had a roller coaster ride these past ten days.  We maintained our advice to lock-in loans at application, prior to and immediately after the Fed decision to cut rates .5%.  We felt there was irrational exuberance among the bond traders which artificially lowered yields.  Those lower yields led to lower San Diego mortgage rates.

Now, we're reversing course.  Irrational fear of inflation exists in the bond markets today.  Bond traders believe that Bernanke's cut may have overreached, paving the way for higher inflation.  We think Bernanke is a whole lot smarter than the bond traders believe him to be; we also think he's judicious in his approach. That irrational fear causes us to advice all San Diego mortgage applicants to cautiously float your rate.  Cautiously floating means you check in with your mortgage adviser daily.  Markets can reverse quickly and we could reverse our recommendation to our locking stance.

Keep checking this report daily for updates.