Mortgage Rates Lower Again Today

Mortgage rates were lower again today, marking the 4th straight day of improvements. In general, it was a quiet day in trading. 

Crude oil on the rise as OEC begins its meeting in Algeria, every time OPEC and oil producers meet the price increases, a few days after the meeting ends in rancor, the price declines.  Always stories about the possible agreement to cut production and always in the end it blows up. With so much oil sloshing around and under the ground, and demand high the odds of a production freeze or cut back are low that a deal will get done and adhered too.  

August new home sales were down 7.6% but better than what was thought after the big increase we saw in July.  It was expected that a pullback would occur. Prices are coming down which points to builder discounting. Prices are not getting much lift from stubbornly low supply which is at 4.6 months. Overall it was a good report even through a decline but from a huge prior month. Treasury sold $26B of 2yr notes this afternoon, and the auction was not very good. 

Might be a big day tomorrow, pending who was considered the “winner” tonight. It will be early and most of the pollsters will not have a clear read until late in the day. The decline in stocks and some improvements in treasuries are not a measure of who is expected to bash the other best, but just balancing their books a little as the race has tightened.  

Tomorrow not much in the way of news with the July Case/Shiller home price index and the September consumer confidence reports coming out. The 10yr broke below 1.60% this afternoon and has declined 20BPS since September 13^th.

In summary, the recovery from the higher rates seen 2 weeks ago allows a bit of breathing room from a strategy standpoint.  In the bigger picture, it still makes sense to defend against the possibility that early July marked a long-term bottom in rates, but risk-takers could use recent highs as "stop loss" levels.  In other words, it's not insane to float in the current environment as long as you lock if rates happen to move back to recent highs.