Mortgage Rate Update May 24, 2011
After taking a temporary dip yesterday mortgage rates have reversed back to Friday’s levels.
Stocks are reacting positively to better-than-expected new homes sales reported for the month of April. Analysts had expected a flat reading and sales rose by 7.3%. However, the overall level of new homes sale activity remains very low.
As I indicated last week the 10-year Treasury note has been testing important technical resistance over the past week but cannot muster enough momentum to break below this yield. Mortgage rates loosely follow the 10-year Treasury yield so we will continue to monitor this market.
- Yields on the 10yr Treasury can’t break through
In the face of $99 billion in new Treasury note supply this week it seems unlikely that rates would break below this level in the near-term.
Current Outlook: neutral