Mortgage Rate Update October 21, 2011

Mortgage note rates are unchanged this morning.

In general, rate watchers can watch the yield on the 10-year Treasury note to gauge the direction of mortgage rates.  However, today is one of the odd days where treasury yields and mortgage rates are not acting in concert with each other.

Most interest rates are moving higher this morning as stocks rallyon optimism from Europe that a credible bailout plan will emerge by next week.

Despite this mortgage rates are unchanged and may even improve a little bit thanks to comments by Federal Reserve Governor Dan Tarullo.

In a speech at Columbia University yesterday the Fed Governor told audience members that he believes the Fed should ramp up purchases of mortgage-backed bonds with the goal of lowering mortgage rates and supporting the housing market.  It’s important to note that there are no formal plans in the works to change the Fed’s policies but the markets are reacting to the possibility of such a plan.

There is no economic data set for release today.  I will recommend floating through the weekend.

Current Outlook: floating