Bryan,
Mortgage rates are derived from long term treasury yields, such as the 10yr yield(^TNX on Yahoo.com). Money usually flows from bonds to stocks and stocks to bonds. For example, if the stock market perceives the Fed cut as bullish, then interest rates will rise that day and maybe more. The opposite is also true if the stock market perceives the Fed cut as bearish.
The decision to lock in at today's rate is a tough one at the moment. IMO, interest rates have shot up dramatically in the last few weeks. They might be at a short term top. It's currently at 6.125% for a 30 yr mortgage. I'm willing to bet that rates will drop soon.
You might want to inquire about a floating lock. I'm not sure if that's the correct term for it. It allows you to lock in at today's rate, but with the option to float down .50%, if rates drop. It will at least protect you in case one of the CDO bond insurers get a bailout. A bailout for ABK or MBIA, will shoot rates to the moon.
If you follow my account talk thread, you will get my opinion on bonds and yields(interest rates) on a daily basis. I post about bonds just about every day.
Good luck.
Bookmarks