Rate Update September 14, 2010
Mortgage rates are better this morning.
After 3 trading days of heavy selling mortgage-backed bonds (MBS’s) caught technical support yesterday which is carrying over into today despite better than expected economic data.
The Commerce Department reported this morning that retail sales increased by more than expected in August. This marks the second month in a row that retail sales have increased. Investors are welcoming this news after months of discouraging economic data.
Encouraging economic news was also issued by the National Federation of Independent Business. They reported that the economic outlook amongst small business owners increased by more than expected this month.
Typically a double dose of positive economic news would push stocks and interest rates higher. However, technical support and a report from Goldman Sachs in which they stated that they think the Fed will re-enter the treasury market to keep rates low are helping mortgage rates.
Current outlook: near-term float, long-term locking