Rate Update September 27, 2010
Mortgage rates are priced slightly worse compared to Friday morning.
It’s shaping up to be another busy week in terms of economic and financial headlines. Mortgage-backed bonds will have to compete directly with US Treasury notes this week. Today, the Federal government will auction off $36 billion in 2-year notes. Click HERE to understand how government borrowing can impact mortgage rates.
Throughout the remainder of the week we’ll get key reports regarding house prices, consumer confidence, GDP, and inflation.
Mortgage rates are likely to remain at these levels (or higher) unless the Fed decides to reenter the Treasury bond market. The Fed may announce such action at the next monetary policy meeting at the beginning of November but only if the economic data is poor over the next month. I expect the markets to react to these economic reports on a day-by-day basis.
Current outlook: neutral