Yesterday the markets where closed in observance of President’s Day.  I hope everyone had a wonderful 3 day weekend.

So far this morning, mortgage backed securities have opened higher.   As mbs move higher in price, mortgage rates move lower in interest rate.  I suspect that most lenders will have par 30 year interest rates anywhere from 4.625 to 5%.  To secure a par interest rate from a lender, you would be required to pay all closing costs associated with your loan and 1 point origination.   You must also have credit scores above 740 and with lower credit scores you will have to pay additional fees to get a par rate or take a higher interest rate.   The only economic report to come out today was the New York Empire State Index.  You can review yesterday’s blog for a definition.  Economists where expecting a reading of -23.0; however, the number came in much worse at -34.7.   Since the actually number was worse then expected, this is a positive for mbs.   Negative numbers show that our economy is contracting and positive numbers show an expanding economy.  Treasuries are also rallying big time today which is helping mbs to improve as well.  If treasuries continue to rally(meaning move higher in price) and the stock market continues to sell off, we could end the day rather nicely which would result in better rates later today or tomorrow. 

Tomorrow, the economic reports start to heat up with housing starts, import prices and industrial production.  Industrial production will be the biggest impacting of the 3 reports.  I will let you know the results once we get them.  You can read yesterday’s blog for a list of all economic reports for the week, their definition and their impact on mortgage backed securities.

I will get back to you later today with an update but mbs slowly but surely continue to edge higher.