Rate Update May 4, 2009

Fixed Mortgage Rates are even with Friday.

Mortgage Backed Bonds are currently trading even on the day and remain above a strong floor of support.  As long as bonds can continue to trade above this level of support, it should be safe to float interest rate locks in hopes that we can see some improvement in the coming days.  If bonds fall much below current levels and break through the floor of support, it will be time to lock on shorter term transactions.

This week, the Treasury will auction $155 Billion in Treasury notes.  This added supply could weigh on Bond prices in the coming days, much like it did last week as the Treasury auctioned off $101 Billion in Treasury Notes. 

Current Outlook: Floating while bonds stay above the current level of support