Mortgage Rates on a Winning Streak

Mortgage rates have been on a winning streak for the past week as we have seen some of the lowest rates since the dramatic increase right after the election.  MBSs have seen a large increase in basis points as well as the 10yr Treasury closed at 2.31%.  We had another record close today as both stocks and the 10yr have moved in same direction (gains) for the past 5 trading sessions. 

Fear and panic buying was the theme today.  Good for our intra-day prices - but when gains are based upon panic buying and not fundamentals, they do not last.  Afternoon interest in MBS picked up after a report hit that Chinese GDP could be overstated by as much 20%.

President Trump gave the first address by a president in his first year since Ronald Reagan to an annual gathering of conservative activists (CPAC).   It was more a campaign speech that did not really address any specifics about tax cuts, etc.

Bond markets continued testing the floors of our recent range today, and mortgage pricing improved slightly.  The end of a month typically generates some demand for bonds, which may explain today's action.  10yr treasury yields are nearing the best levels since the end of November.  I am almost believing this rally has legs, floating may be a viable option for those with some risk tolerance.  In terms of lock/float strategy, the longer these winning streaks go, the more likely they are to run into resistance.  Closing within 15 days?  I would grab the money and lock to avoid any losses next week.

In summary, MBSs are managing quite the rally over the last couple days.  We have not seen these rates since the end of November.   If you are happy with today’s pricing, nothing wrong with locking in these recent gains, but I think floating as I am never a fan on locking on Fridays.  Stay tune to the market when it opens on Monday.