Rate Update for July 25, 2008
Mortgage rates are essentially unchanged this morning.
Yesterday morning we shifted out outlook to “floating” because of the reversal of mortgage-backed bond prices. Unfortunately we did not see any follow through this morning and therefore have shifted our outlook back to neutral.
The reason bonds were unable to follow through on the rally yesterday is because of a string of economic reports which each indicated better than expected results. Good news for the economy tends to be bad news for mortgage rates and that is why we have shifted to less optimistic stance.