Mortgage Rate Update May 28, 2015

Mortgage note rates are mostly unchanged from the beginning of the week but the accompanying closing costs are slightly less.

On Tuesday I highlighted the technical trading patterns that were evident in the mortgage-backed bond (MBS) market (CLICK HERE to review).  Currently MBS prices have tentatively broken above technical resistance which is a positive sign for the direction of mortgage rates.  However, it is premature to declare a victory.  Stay tuned….

More positive news for the housing market today.  According to the National Association of Realtors the number of pending sales rose by 14% from the same time last year.  From March to April they rose 3.4%, the highest one month increase in 9 years.

Tomorrow the financial markets will absorb the latest estimate of first quarter GDP and consumer sentiment.  If you’ll recall the US economy actually contracted in the first quarter as a result of the severe winter weather in the northeast.  Bad news for the economy is often good news for mortgage rates.

For now I will recommend a floating bias but should MBS prices retreat back below the aforementioned technical resistance we’ll need to shift to locking.

Current Outlook: floating