What's going on and why does it matter?

Mortgage bonds are continuing to hover near their 100-day moving average, as they appear to be at a crossroads of "rebound" or "resume decline."  Mortgage pricing could deteriorate further if bonds fail to jump back above this critical level. 

The consumer inflation and retail sales reports came out this morning weaker than market expectations.  This is typically seen as good news for bonds, and it will be interesting to watch the market's reaction today.  

The Fed is scheduled to purchase up to $1.625 billion of 30-year conventional mortgage bonds today, which may help mortgage pricing to improve.

What should you do about it?

Watch for mortgage bonds to rebound from these levels, but lock your rate if bond prices resume their decline.

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