Rate Update July 14, 2010

Mortgage rates are unchanged this morning.

After mortgage-backed bond (MBS) prices fell yesterday afternoon, threatening to push rates higher, they have recovered this morning on technical support and weak economic news.

Bad economic news is often good news for mortgage rates.  This morning the Commerce Department reported that retail sales fell in June by more than analysts had expected.

Also helping mortgage rates this morning is technical support.  MBS’s fell to the 20-day moving average yesterday afternoon and has bounced off that level since then.

Later today the US Treasury will auction $13 billion in 30 year bonds and the Fed will release minutes from the last monetary policy meeting.  Each of these event have the ability to impact the markets.

Current outlook: neutral