Mortgage rates are under pressure again today.
Long-term treasury notes and mortgage-backed bonds (MBS’s) are trading lower this morning as the US Treasury gets set to deliver $118 billion in treasury note supply this week. It kicks off today with $44 billion in 2-year notes. The additional supply of treasury notes competes with MBS’s for investment dollars. Therefore, a greater supply weighs on prices across the bond market; pushing yields higher.
We will get a few economic reports tomorrow and Wednesday that could move the markets. With mortgage rates moving higher in a thinly traded market I believe we could see rates rebound at the beginning of the year. However, given the momentum behind the current move it’s a risky proposition.
Current outlook: neutral