Fixed Mortgage Rates are up significantly from yesterday.
Mortgage Backed Bond suffered a pretty big hit yesterday as news was released that the Treasury would be auctioning off $104 Billion in notes next week. At the time of yesterday’s rate update, bonds were trading down about 25 basis points…they finished the day down 119. Many lenders had multiple price changes in wake of the free fall, which caused rates to jump up .375% in the last two days.
Today, Mortgage backed Bonds are trying to rebuild a bit and are currently up 19 basis points; but trouble looms ahead. Stocks are in positive territory today which could take away some investor dollars from the bond market. And let us not forget that next week we still have the actual auctions in Treasury notes; yesterday’s plummet was only due to the announcement of that auction.
The New York Fed purchased $20 Billion of Mortgage Backed Securities last week, bringing the total to $550 Billion out of the $1.25 Billion that they have committed to purchasing. Next week, it will take a lot more than $20 Billion in purchases to stop the bleeding from the extra supply being put on the market from the Treasury auction.
Current Outlook: Locking