Mortgage Rates Feel Some Love

Mortgage rates are finally realizing that the month of February is all about the love – but as Valentine Day came upon us nearly two weeks ago - the rates were in a middle of a free fall that did not look like it was going to stop.  Today, the US financial markets were very quiet after the strong move in MBS's and treasuries yesterday. Trading ranges in stocks and bonds very narrow today.

Even though there was not much movement, taking a look at yesterday and seeing that there was no retreat today, states a case that the love may be coming back for the mortgage rate market, but do not yet start thinking this will happen – I only say this as the door is now open for a push back to continue – if any at all.

Today nothing happened, even with the data that came out which was a bit negative on housing starts.  Yellen endured the House Financial Services Committee today - Republicans in Congress as well as Democrats and the White House have sat on their collective butts for five years now letting the Fed hold the economy together. Not a huge fan of the Fed, but Congress is well down my list for accomplishing much.

Rate markets at critical technical levels with the 10yr sitting at 1.97%, today unable to break below the 20 and 40 day averages on rates. The same technical resistance can be seen in MBS trading.

In summary, having made our way through the two day Fed testimony without stepping on any landmines I am optimistic about where rates can go from here. This is the third day in a row we have seen lower yields in influential long term treasuries. In addition and perhaps more importantly technical resistance levels are being pushed which can be another positive sign for rates. There is a slew of data due out tomorrow morning.  All depends what happens then, but as far as I see, the next few days will be again setting the table for the future.