Rate Update March 26, 2010

Mortgage rates are unchanged from yesterday.

Yesterday’s 7-year Treasury note auction was met with tepid demand.  Here on ‘rate update’ I have been monitoring the US Treasury auctions since the beginning of the year but this weeks marks the first time they’ve had a substantial impact on borrowing costs.  This chart in today’s Wall Street Journal does a nice job of summarizing the week. 

This morning’s GDP report from the Commerce Department showed that inflationary pressure remains subdued in the economy.  Low inflationary pressure is a good sign for mortgage rates.

Lastly, the Obama administration released details about their latest effort to curb foreclosures.  You can read details HERE.

At this point it appears that mortgage-backed bond prices have stabilized.  I continue to support a long-term locking bias but we may see modest improvement in the near-term.

Current outlook: neutral