Friday ended strong with Mortgage Backed Securities (MBS) , the money that mortgages turn into that is traded between big banks, improving right up through closing. Today, after some volatility, MBS have held on to those gains which has caused most lenders to release pricing slightly better than Friday. The numbers may have been better but for the NAPM index report which is a gauge of business conditions in the Chicago area. This report was slightly stronger than expected, but still shows economic

Yesterday's Home Sales figured beat expectations by a bit for the first time in a long time. The market rode that wave all the way to close which drew a lot of money out of the Mortgage Bond market, forcing interest rates up. It had seemed for a moment that traders and analysts forgot we are headed into a full blown recession! Fortunately the consumer confidence numbers served up a sobering slap in the face about 10 minutes ago coming in with the weakest reading in years. Mortgage Bonds are immediately

"Up" refers to price in this case, specifically the price of Mortgage Backed Securities (MBS), which are the securities that directly govern mortgage rates. And "up" in price means "down" in rate. We have 30 minutes to go until important economic data is released regarding economic indicators and the manufacturing sector, but earlier this morning, the Jobless claims report was released slightly worse than expectations. This is generally good for mortgage rates as a weak economy causes investors to

After quite a bumpy couple of weeks, the mortgage market finally caught a break when Bernanke announced that the Fed would make 200 billion dollars available in a short term auction. Why is this good for rates? Because the participating dealer banks will be able to trade in their Mortgage Backed Securities for Treasury Bonds. In effect, this means that the Fed is knowingly buying a more risky asset in order to provide more much-needed liquidity for mortgage lenders. So this is a shot in the arm for

Yesterday was quite a bad day for mortgage rates despite a weak stock market and a strong 10 year treasury. When stock prices are down, treasury yields are down, and mortgage yields (interest rates) go up, it's a sign of some problems. There were several pieces of economic news that spoke specifically to weakness in the mortgage market, which has investors wary about buying mortgage bonds, even though they are priced historically at all time lows compared to the 10 year treasury. Remember, the more

Economic reports were mixed this morning with some showing weak employment figures and others showing a brief stabilization in the non-manufacturing sector. Whatever the case, the Mortgage Bond market apparently had farther to fall from yesterday's slide. Rates should worsen again today as the two main enemies inflation and weak demand continue to cause selling of mortgage bonds. Remember that Mortgage Bonds are directly related to interest rate. When more traders sell than buy, prices go down as

Even though today's economic data was weak, inflation concerns are keeping rates from improving. Economic reports showed a contracting manufacturing sector and further decreases in construction spending. In addition the PA Fed President Charles Plosser commented that lowering interest rates was a bigger priority than fighting inflation. So what gives? Remember that the Fed rates do not equal mortgage rates. Mortgage rates are tied to MBS (Mortgage Backed Securities) which are traded like other bonds