Fixed Mortgage Rates are even with yesterday.
Mortgage Backed Bonds were trading towards the top end of the trading range yesterday afternoon, just under the current ceiling of resistance which is the 25 day moving average. After several attempts this morning to break through that level, mortgage backed bonds seem to be loosing some ground. Since bonds have been trading within this present trading range for a few weeks now, it may be a good idea to lock in rates while bonds are at the top of the trading range on short term transactions.
In an attempt to keep mortgage rates low, the NY Fed purchased $26 Billion of Mortgage Backed Securities last week. The bonds that were purchased were those of 4%-5.5% coupon rates. I have spoken about this before, but if mortgage rates are ever going to get down to 4.5% again; lower coupon rates such as those in the 3% range will need to be purchased. My outlook for the near future is therefore that mortgage rates should stay in the range that we have been experiencing for the last couple months, but it is unlikely that they will fall to levels we saw in early January. But then again, it is an open market and the Fed is just one of the many investors throwing stones into the pond.
Current Outlook: Locking on short tem transactions