We just got the release of all the economic data for the day. First we got the release of pending home sales which dropped 4% to 82.3 when economists where expecting 88.0. This is bad news for housing, but keep in mind not many people are buying or selling a home in December so with less volume of sales you will see bigger swings to the numbers. Next, we got factory orders which came in much worse then expected at -4.6% when economists where expecting a -2.6% drop. Lastly, we got ISM services index which came in better at 40.6 versus expectations of 37.0. Investors seem to have paid these reports no attention.
We still have the release of the FOMC minutes at 2pm eastern. The release of the minutes from the last fed meeting gives investors an insight as to what the Fed is thinking and has the potential to be a big market mover. I do not suspect that this release will have any meaningful impact on mbs pricing today.
As stated yesterday, the Fed has started its buying of mortgage backed securities. We have been waiting for this to happen, and this will help prevent any sizable sell off of mbs which would cause mortgage rates to increase. Lenders are still holding back on their rate sheets but from early reports some lenders are starting to pass along the improvements. We should see this continue over the next few weeks even if mbs hold steady at current levels.
On a side note, treasuries are getting hammered again today. If you are working with a loan officer or you are a loan officer watching the 10 yr Treasury note, you have your eye on the wrong ball. Mortgage rates follow mortgage backed securities so if you have been watching the 10yr, you would think that rates would be worse today after the big sell off yesterday and continues today, but rate sheets are better today due to mbs improving in price yesterday and still today. For any mortgage professional who reads the blog but does not have access to mbs pricing, do yourself and your clients a favor, get access. There are several pay sites to gather this information, and by far the best is mbslive where you receive real time, not delayed mbs pricing.
Float boat is still at sea, but do not delay your closing to get a lower rate. If you are set to close, go ahead and lock and put your mortgage behind you. I still believe that lower rates are still to come, but life happens and things can change outside of your control which could prevent you from buying or refinancing in the future. If your loan is closing next week or after, then you are safe to float; however, once your loan is clear to closed, lock on a 15 day lock which will help you secure the best rate.
Currently mbs are rallying higher and are up 22 ticks on the day.