At the current price of the 5.0 mortgage backed security, we should be seeing rates lower then lenders are offering.  The reason for this might be that lenders got a huge influx of locks last week and with the heavy volume they do not need to price in the gains.  If you have not locked your rate yet, you are cleared to float but stay tuned to the blog as we will update as necessary.  The best that we can hope for today is to move sideways as a few things are stacked against us this morning that will probably prevent a rally.  First of all, the stock market had a huge selloff yesterday so it is ripe for a reversal today which will draw money out of bonds into the stock market.  Secondly, treasuries are at an all time low yields and they are also ripe for selling and profit taking.  If this happens, mbs will probably follow the trend lower.  Currently the 5 yr and 10yr treasury are down about 2 ticks and the 30 yr treasury bond is down a whopping 40 ticks.  The spread between treasuries and mbs still remain at very high levels and some tightening is to be expected.   

The good news is 30 year fixed rate mortgages are holding steady in the low 5% range.  It has been our opinion that rates at some point will move lower, but if you have a mortgage over 5.75% contact your loan officer and look into a refinance.  If you have been pondering the purchase of a home, now is also a great time as homes are on sale and rates are fantastic.