Mortgage Rate Update February 9, 2011
Mortgage rates are higher this morning.
After seven straight days of rates creeping higher mortgage-backed bonds have finally found technical support. Anytime we see an acute movement in rates in a short time-frame it’s common for rates to reverse before continuing on their longer-term path. This is where we find ourselves today. I expect rates to improve on a near-term basis but that doesn’t change the fact that rates are headed higher in 2011.
Fed Chairman Ben Bernanke is currently testifying in front of lawmakers in the House of Representatives. It is expected that newly elected Republican congressman will grill the Chairman on QE2 and government deficits. Bernanke is usually very composed in these situations but if he goes off script we could see the markets react.
The US Treasury is back on the auction block today with $24 billion of 10-year notes. Yesterday’s 3-year note auction was not met with as much demand as expected which contributed to rates moving higher yesterday afternoon.
I will temporarily move into a floating position but we’ll quickly switch back to a locking stance on any improvement to rates.
Current outlook: floating