Bond markets opened and spent the first hour of the day in weaker territory, but began to recover even before the Existing Home Sales data.  That recovery continued after the weaker-than-expected data, though not necessarily because of it. 

Given the fact that stocks are also rallying and that the data had little visible impact on bond markets, it's more likely that the recovery is fueled by less overt factors.  These include a technical predisposition to "hang out" near 2.75% in 10yr yields as well as ebbs and flows related to the corporate bond market.  Ultimately, it hasn't been too hard to create the limited amount of movement given today's fairly low volume.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
96-12 : +0-02
FNMA 3.5
100-20 : +0-01
FNMA 4.0
104-03 : +0-01
Treasuries
2 YR
0.3182 : -0.0038
10 YR
2.7482 : -0.0058
30 YR
3.7083 : -0.0177
Pricing as of 2/21/14 12:13PMEST
Morning Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
11:26AM  :  Bond Markets Back to Unchanged Levels
10:12AM  :  Existing Home Sales Slightly Weaker than Forecast; Limited Reaction
9:12AM  :  Bond Markets Weaker Into US Session After Calm Overnight Trading
Live Chat Featured Comments
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Victor Burek  :  "I was surprised to see we didn't have a green day after the china data, Europe data and us data that was all pretty bad"
Charles Tadros  :  "But isn't that already factored into the projected estimates ?"
Matthew Graham  :  "i think the best explanation is that mathematical models factor heavily into estimates"
Matthew Graham  :  "RTRS- US JAN EXISTING HOME SALES 4.62 MLN UNIT ANNUAL RATE, LOWEST SINCE JULY 2012 (CONSENSUS 4.68 MLN), VS DEC 4.87 MLN (PREV 4.87 MLN)-NAR"
Matthew Graham  :  "RTRS- US JAN EXISTING HOME SALES -5.1 PCT VS DEC +0.8 PCT (PREV +1.0 PCT)-NAR"
Sam Baugh  :  "what happens if we actually get some data that beats estimates? "
Mike Drews  :  "so when the weather improves?"
Matthew Graham  :  "yeah, I guess it depends when it happens SB. If strong data trumps the weather excuse, I imagine it wouldn't be good, though I'd add that markets want to see a trend as opposed to an isolated instance."
Sam Baugh  :  "but west coast saw major declines in home sales as well. In socal we are probably having the best winter weather in recent history"
Matthew Graham  :  "yeah, we talked about that a bit yesterday. Cali has run into affordability issues that are independent of weather and began well before Winter."
Matthew Graham  :  "I don't think it has anything to do with weather in CA."
Sam Baugh  :  "right the investor buyer no longer driving the market anymore in CA"
Matthew Graham  :  "linked this yesterday http://mndne.ws/1fmTV7q That's not the kind of thing that can be true for too long without consequences--at least not when rates have risen enough to cool-off investor purchases."