Technical trading patterns are what helped mortgage rates move lower yesterday afternoon. In yesterday’s ‘rate update’ we stated:
“Mortgage-backed bond prices continue to trade just above important technical support. We are watching this level and hope that prices hold. If prices should slip we will shift our outlook to a locking stance.”
Not only did bond prices hold yesterday afternoon but thanks to weakness in the stock market they rallied which pushing mortgage rates lower. Below is a chart showing bond prices hitting the technical support level (shown in circle). The green bar to the right of the circle represents bond prices moving higher off this level. This is a good sign for mortgage rates and so we shift our outlook to floating.
Current Outlook: floating