Rate Update February 23, 2010
Most mortgage rates are unchanged this morning.
Mortgage-backed bonds (MBS’s) are trading higher in early trading in response to weaker equity markets across the globe. Stocks and bonds often trade inversely with each other which is what is happening today.
Why are stocks trading lower? Both consumer confidence in the US and business confidence in Germany were reported weaker than expected earlier today. Weak consumer and business confidence is a sign that spending will remain soft in the future.
We may see rates improve modestly from these levels later in the morning but I don’t expect the good times to last long. The US Treasury is scheduled to auction $44 billion in 2-year notes and MBS’s are facing tough overhead technical resistance. We are going to shift our outlook to locking at the end of the day today.
Current outlook: neutral this morning, locking by end of day