Mortgage Rates Barely Budged Today

Mortgage rates barely budged despite the fact that MBS prices and treasury prices increased today - not much and still technically bearish. All about Greece, markets completely obsessed with it, maybe too much but that is what is driving markets these days. Meanwhile economic data is gaining momentum in about every sector but manufacturing.

EU finance ministers met again today, the third meeting in a week with no resolution. Meetings are expected to go on late into the evening, but based on various responses a deal appears far off; the deadline is next Tuesday for payment to the IMF - unless the deadline is extended which is likely if there is no deal by then.

Treasury auctioned $35B of 5yr notes that met with luke warm demand. Tomorrow Greece will still slip around but there is data of substance. May personal income and spending, the PCE core (Fed’s favorite inflation gauge), Weekly claims, and the Treasury will finish borrowing tomorrow with $29B of 7yr notes.

Longer term interest rates (the 10yr and MBSs) are still in a very tight range. Waiting on Greece but even if a deal is done or not the world is making too much out of it. The concern is corruption but that is looking too far ahead in our opinion. No corruptions as long as the creditors stick to their demands. Nevertheless that is the present reality. Technically still bearish with very little movement in either mortgage rates or the benchmark 10yr note. Lots of ink and comments but little change in the situation in Europe.  

From a lock/float standpoint, this decreases the potential reward for waiting to lock.  That outlook does not really begin to improve until we see several successive days of improvement in markets and adjustments in lenders' rate sheets that keep better pace with the market movement.

In summary, mortgage rates improved ever so slightly today. I hold the belief, at this time, that if your scenario works...lock it. The theme remains the same, until we see a significant corrective move lower, the greatest risk is rates moving upward.