Best Day of the Year for Mortgage Rates

Mortgage Rates fell at their fastest pace in 2014 and to their best levels for the year.  Such a feat was only manageable due to what has been an exceptionally flat market up to this point.  Even today's move was fairly small by historically standards, equating to only 0.03 percent in terms of rate.  That means that the improvements over yesterday would be seen in the form of lower closing costs with interest still averaging 4.625% for ideal, conforming 30yr Fixed loans.

To put the recent flatness in more perspective, there have only been 3 days in the past 30 where rates moved any more than they did today.  It continues to be the case that the events in the latter half of the week (beginning tomorrow morning) have more potential to break the monotony, or rather, to continue breaking the monotony that was preemptively broken today. 

Whereas the movement seen so far in 2014 has largely been a product of market participation ramping back up, the upcoming movement may be more motivated by the tenor of the economic data.  As such, strong data can push rates back toward recent highs while weak data could help this correction/bounce continue.

In summary, as we conjectured yesterday, we got some additional pricing gains today. The bulk of this week's MBS "meal" starts tomorrow with a salad of ADP December Employment and December Fed minutes. The entrée arrives Friday AM when Decembers' NFP jobs report is released. Nice to see improvement, but it's nothing definitive at the moment.   Cautiously float but realize big risks.

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