Mortgage Rates Steady

Mortgage Rates held steady today, even though some lenders did try to lower rates compared to the end of last week.  Mortgage Backed Securities (MBS) benefited from weaker economic data and general strength in Treasuries. Mortgage rates didn't quite return to Thursday's levels, but 4.375% was able to come back into play but the most prevalently quoted 30yr fixed rates for the very best borrower scenarios.  4.5% still is being quoted, but not as much as it was the last two days of last week.

The news of the day was the Feb NAHB housing market index which set a record for decline since 1985 when the index started, from 56 in Jan to 46 in Feb (50 is the pivot between expansion and decline). I realize you are sick of hearing that the weather is playing out here but that is what is happening to all the data since Dec.  There isn't anyone that has a solid insight about the economy now, and that won’t change for another two months when March data begins to surface, and of course that depends on ---wait for it---the weather through the rest of this month and March.

Today's improvement is a welcome development, suggesting that some of Friday's weakness may indeed have owed itself to conservative pricing/trading strategies ahead of the 3-day Presidents Day weekend. What had been a fairly linear move toward higher rates so far in February is now leveling-off.  This sort of movement often resolves itself with a more pronounced move higher or lower.  As we get more economic data in the coming days, including the Minutes from the most recent FOMC Meeting, we should find out more about which direction will win.

In summary, we will take the improvements even if it they seem to appear for no reason. Bad reports so far this month have not generated the type of bond reaction you would typically see. Nothing today to swing the tide from a report standpoint, yet rates are improving. Even stocks are flat so a sell off isn't the culprit. Maybe the trend will continue as we head into the home buying season.  I am now in favor of floating until tomorrow to see if the data continues to disappoint and allows lenders to pass along more of the gains.

If there is any questions you may have in regards to your financing, please give me a call at 314-744-7806, or visit my website at www.CallTheMoneyMan.com.