Mortgage Rates Remain Unchanged Even with the MBS Moves

Mortgage Rates still remain unchanged, but the Mortgage-Backed Securities (MBS) had a major sell off. What does this mean? We had been seeing with all the various issues around the globe that the rates were trending lower, but could not jump that last hurdle. New home sales came in below market expectations, with the prior numbers revised downward. Even though the news seems to point towards the negative, the bright side of the report showed inventories hitting a 6 month reserve, and median sales prices hitting an all-time high.

More selling did occur in the stock market today as we saw the 10 yr and MBS prices get worst. This week the FOMC (Fed’s) meeting is likely going to keep some lid on how low rates may fall as we hope this push subsides from present levels. It is dependent on the equity markets if the key indexes turn and rally back, with the Fed expected to taper the 10 yr and MBSs will retreat from the present lows. This fork in the road will take one direction or another.

With the current market, 4.5% remains the most prevalently quoted conforming 30yr fixed rate for ideal scenarios, but as we hoped on Friday for some better turns, it just does not seem to make up its mind.

In summary, it was a mad house today as all the gains seem to be heading in the wrong direction. It is still too early to say if this is the start of a larger move, or a momentary pause in the long term trend towards higher rates, as we await for the announcement later this week. For the first time I suggested floating today and will do such again very cautiously - with a quick finger on the lock button, as long as you're aware that quick gains as we saw today can evaporate equally quickly.

If you need any assistance with your financing, give me a call at 314-744-7806, or visit my website at www.CallTheMoneyMan.com.