Last week marked new yearly 2011 lows for mortgage rates as a debt ceiling agreement was reached early in the week. These low rates were sustained through out the week with a small uptick on Friday when the Non-Farm payrolls came in stronger than expected.

Fast forward to today and the markets are being rocked by the S&P downgrade of U.S. credit worthiness. As a result, the Dow closed down 634.76 points or -5.55%‎, wow. This should bad for mortgage rates, causing them to rise, but there is significant concern and uncertainty in the markets about the US and World Economic outlook, which have helped rates maintain their current low levels.

What Will Happen With Rates This Week?

Volatility is the theme of the week, which means it’s hard to tell. Factor in the Fed meeting tomorrow and we’ve got yet another wildcard that could negatively or positively affect rates.

The bottom line is that rates are at record low levels and when rates move up, they will do so quickly and without warning. If you are looking to lock in a low rate, now is the time to do so, to hold off for lower rates is simply gambling. If there has ever been a sensible time to lock in a low rate and savings, this is it.

Economic Calendar for Week of August 8, 2011

• Tuesday – FOMC Meeting
• Wednesday – Wholesale Inventories
• Thursday – Initial Claims
• Friday – Retail Sales, Michigan Sentiment