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Mortgage rates bounced around a tight range for most of the week. There wasn't much in the way of news to motivate movement in the first three days of the week. Although we did get several key earnings releases, the economics calendar was essential empty and the market's general tone reflected a lack of conviction. Rates were unchanged on Monday, rose modeslty on Tuesday then recovered from weakness on Wednesday only to give it back positive progress on Thursday after the Treasury announced the terms of next week's debt auctions. This left rates a few bps higher (vs. Monday) heading into today. ...

I have been advising LOCK all week. If you locked, way to go! Good timing. If you did not lock, we have some deep thinking to do. I think the easiest way to gauge that decision is: DO YOU THINK STOCKS ARE GOING TO CONTINUE TO SELL OFF or DO YOU THINK STOCKS WILL CORRECT FROM RECENT WEAKNESS. Given the relentless rally we saw in stocks from March until just recently, and the marginally more optimistic FOMC statement, I would think stocks would recover from recent weakness. This would put added pressure on interest rates to rise. Tomorrow, we get several economic reports to influence our decision, including the first read on Q4 2009 GDP, Chicago PMI and Consumer Sentiment. We know 4th quarter GDP was strong, combine that with the fact that stocks are searching for a reason to rally, and the outlook for interest rates is not consumer friendly.I think mortgage rates are still super aggressive. I would be locking still. ...

Following the seemingly bottomless rates selloff that occurred on Monday, benchmark Treasury and MBS prices underwent a corrective rally yesterday. Buying beget more buying and before we knew it, the 10yr Treasury note yield was back under 3.50%, helping MBS prices move considerably higher. A strong auction of $44 billion 2 year Treasury notes helped add momentum to the rally as well. MBS prices held into the close which allowed many lenders to republish rate sheets for the better, lowering consumer borrowing costs. Again, MBS have moved back into the well defined range which we have used as a gauge of lock/float strategies. To remind readers, since MBS prices began trading in a range, borrowers have had great success floating when MBS prices were at the low side of the range and locking when MBS were at the high side of the range. The last couple days, MBS have been testing the low end of the range, thus my recommendation for floating. With yesterday’s rally, MBS have moved comfortably into the middle of the range and mortgage rates are lower. ...