Rates are lower this morning.
As we had suspected, weakness in the stock market yesterday helped mortgage-backed bonds rally which is why mortgage rates are improved this morning.
However, this improvement may be short lived. We see two major themes working against mortgage rates today.
First, the stock market is back at it. The Dow Jones Industrial Average is currently trading higher by 170 points. We know that often times the stock market and bond market can trade inversely which could put pressure on mortgage rates to move higher.
Second, technical trading patterns suggest that mortgage-backed bonds will have trouble rallying anymore. Mortgage-backed bond prices touched the 25-day moving average this morning. Without any inflation related news it will be difficult for bonds to “break through” this resistance.
Current Outlook: locking