Mortgage Rates Under Pressure Today

Mortgage rates started the day slightly lower but retreated during the day as more Fed officials were stirring the pot. MBS prices were under a little pressure this afternoon, with the 10yr note yield increased 2BPS from yesterdays close to 2.26%. Looked good this morning but still no heavy buying over terrorist news this week.

Next week is a holiday week, markets closed on Thursday but by noon Wednesday markets will thin out, and stocks will close at Noon and the bond market at 1:00 PM on Friday.  The week has housing data - existing and new home sales, Case/Shiller home price index and the FHFA housing price index.  The second read on Q3 GDP, November consumer confidence index,  the final U. of Michigan consumer sentiment index, November personal income and spending. The world still focused on the recent terrorist threats, as long as there is not another attack next week we do not expect the markets will be any more concerned as they were this week. Next week has a lot to focus on and is one week prior to the November employment report that will either cement a rate increase or throw markets back into chaos over the Fed.

The technicals still holding for more of a bounce back but our wider work remains bearish. After two weeks of slightly better prices but no significant movement I am losing patience.  Usually when markets do not cooperate with the momentum oscillators it is best to step quietly. Even though this week both the 10yr note and MBSs were virtually essentially unchanged, I still floated hoping for something to materialize.

In summary, this morning was a pretty good time to lock in loans. As the day progressed, traders left on vacation and bonds took a turn for the worse. At this point I am still floating, but I am looking at risk tolerance/pricing sensitivity for loans with more time.