Mortgage Rates Positive Movement Stopped

Mortgage rates showed very little activity today after the positive move we had yesterday.  It seemed like everyone was taking a break in anticipation of what happened, and is now trying to calculate what will happen in the future.

MBSs tried to hold onto all the gains it got after yesterday’s announcement.  Even with the little reaction that came from this morning’s data in regards to February Housing Starts, Weekly Jobless Claims, and the Philly Fed Regional Manufacturing Index, we did see a little bit of a pullback and the 10yr climbing back to 2.54%. There were no surprises in the Dutch election, as the far-right candidate came in a distant second.

Tomorrow, Industrial Production and Consumer Sentiment will be released.

As a mortgage rate shopper, it is important to know when today's rates are changing. This is because, when mortgage rates change, mortgage lenders will not honor rate quotes which have not been previously "locked".

From a lock/float standpoint, the improvement we got yesterday could be considered one of those "tactical opportunities" to lock now, even if you are closing more than 60 days from now.  However, risk-takers would not be outside their rights to continue floating, but it is less advisable as it was last night.  I personally would have wanted to see further improvements today in order to feel like taking that risk in the current environment.

With fiscal and monetary policy paths, both clearly putting pressure on rates, at least one of those would need to make a noticeable change before anything but a cautious, lock-biased approach makes sense as a baseline strategy.  Floating should only be considered as a tactical opportunity to capitalize on temporary corrections.

In summary, we had a nice rally yesterday and saw improved rates/pricing, but the rally appears to have stalled today.  In my opinion it is a great time to lock in the recent gains.