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Mortgage Rates 7/23/2015

As I mentioned the other day, Mortgage Backed Securities are just hanging out, so I’d like to look at the technical picture and then just breakdown some real world, what does a 1/8^th of a point mean, data.  When you look at the graph, you see the 50 DMA has been tough overhead resistance for the past 3 months, so I still have a locking bias.

Now when you look at what 1/8^th of a point means, because it sounds like it matters more than it does, 1/8^th of a point is basically $7 for every $100,000 financed.  You can see in the grand scheme of things it has very little impact on the monthly savings and if it is the difference in someone buying a home or not, we as mortgage professionals have not done our job of advising you, our clients, as to what you should really be paying per month for your budgeted monthly housing payment.  Frankly, floating is just not worth the risk or stress consumers put themselves through trying to wait to get a 1/8^th of a point better in this market.

Mortgage Rates 7/21/2015

Mortgage Backed Securities, MBS, and therefore mortgage rates are drifting the day away.  There is little economic data and although they did start the day down 11 bps, they are currently up 20 and we may see some afternoon reprices for the better.  I’m still recommending locking, but I would wait another few hours to see if the reprices come through.  As far as the rest of week goes, the economic data is light; expect the drift to continue and MBS to respond to the technical trade patterns, which are currently just above the 25 DMA and whatever way the wind blows, in this case the stock markets will affect them too.

Stocks are down sharply this am, like yesterday morning.  The difference is Mortgage Backed Securities were up sharply when stocks opened down.  Today they are hovering above resistance.  I’m cautiously floating to start the day as Greece and China could have an interesting effect on our market.   Should they cause the S&P 500 to dip much lower we could see a little rally in bonds.  Overall my bias is still towards locking.