All of the losses suffered in the rates market following the much better than expected employment report have now been recouped. Prices of mortgage backed securities have steadily improved yesterday, allowing many lenders to reissue rate sheets with better rebate and lower consumer borrowing costs.  Although no data was released, there was plenty of Fed speak to move the markets. Of particular note,  interest rate friendly comments from Ben Bernanke, the Chairman of the Federal Reserve, helped the rally gain momentum.

Like yesterday, today's calendar does not offer any headline economic data. However, at 1pm, the Treasury will auction $40 billion 3 year Treasury notes.    Market participants look at the demand for our nation’s debt to gauge how successful.  So far this year, demand especially from foreign investors, has remained very strong, which is one of several factors contributing to stable mortgage rates, near historically low levels.   With year end fast approaching, demand is expected to remain strong, however a weak auction could pressure mortgage rates higher.   Matt and AQ will post the results once the auction is complete on the MBS Commentary blog.

Reports from fellow mortgage professionals indicate improved mortgage rates this morning.  The par 30 year conventional  mortgage rate has fallen overnight to the 4.625% to 4.875% range for well qualified consumers.  To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee.  If you are seeking a 15 year term, you should expect a par rate in the 4.125% to 4.375% range with similar closing costs. 

Over the last year, 30 year mortgage rates have tested 4.50% on several occasions, but rarely have rates moved below this level.  While several lenders have offered 30 year mortgages at 4.375% (for consumers with exceptionally high fico scores and loan to values