Rate Update January 13, 2010

After mortgage rates improved yesterday they are unchanged this morning.

Yesterday’s $40 billion 3-year note auction went well but did not materially impact the market.  Today the US Treasury is back in the saddle auctioning off $21 billion in 10-year notes.  The yield on the benchmark 10-year treasury note has come down by about .1% in the past week (as have mortgage rates) so we’ll need to watch and see if the additional supply impacts things.

If this afternoon’s treasury auction goes well I wouldn’t be surprised to see rates dip another .125% or so.  If that occurs I have a feeling this may be the last time we see 30 year fixed rates below 5.00% in quite sometime.

Current outlook: neutral with locking bias should rates improve anymore