Mortgage Rates Sideways Today

Mortgage rates are moving sideways today.  We have seen some very positive movement in the MBS market the last two days which has resulted in lower rates and fees that were out there last week.  The 10yr at 11:00AM is at 1.62% and is trying to test the 1.60% mark.

Today we see the Fed Presidents return to their speaking rhetoric as three of them are scheduled out there today.  They will not have anything new to say, but again, they will structure it to sound important for us to consider that they have an idea what will happen in the future.  If you are still going to believe that, I still have that bridge I mentioned yesterday for sale.  The biggest news is what the Presidential Debates bring in on Monday – as that is keeping the market in check today.

We are currently at the new lower range of the current mortgage rate channel and do not expect mortgage rates to improve too much today.  It will take a lot of bad news to push rates lower, not much more to go and the Fed has trapped itself into a December rate increase. There are investors and traders that already are thinking the Fed will not move - depends on the economic performance in the next two months. Q3 GDP forecasts have been coming down the last few weeks as August data failed to rise to expectations.

Next week has a lot of key data and Treasury will auction 2s, 5s and 7s. August new home sales, the final Q2 GDP, personal income and spending in August, two measurements of consumer attitudes and 10 Fed official’s speeches.

I also expect mortgage rate volatility to be relatively low with a bias to slightly higher mortgage rates.  It will take some really bad economic news to push us significantly lower and increase volatility.  My thoughts is to remain floating with caution unless you are ready to close – these rates are still not bad, in fact, they are very attractive!