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The Department of Treasury announced the terms of next week’s debt offering. They will sell $44 billion 2 year notes, $42 billion 5 year notes, $32 billion 7 year notes, and $11billion 5 year TIPS notes for a total of $129 billion. All auctions amounts were as expected with exception of the 5 year TIPS offering, that was $1bn larger than the previous auction. The added supply of debt on the market pressured both treasury and mortgage yields higher. The Treasury rally that helped mortgage rates recover from the previous day's marginal weakness reversed course today. Once again we have taken one step forward only to immediately take one step back. ...

Reports from fellow mortgage professionals indicate lender rate sheets to be worse than Friday. The par 30 year conventional rate mortgage has risen to the 4.875% to 5.125% range for well qualified consumers.These rates are the most aggressive in the mortgage market, only very well qualified consumers will have access to these borrowing costs. To secure a par rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less. These quotes also assume the borrower is willing to pay all closing costs including an estimated one point loan origination/discount/broker fee. Your mortgage professional should be able to provide you with a breakeven analysis to determine the optimal fee vs interest rate. If you didn’t follow our LOCK advice from last week, that means you are still floating today. While lenders were likely conservative today, I am still favoring locking in loans. . ...

Last week ended basically where it began with prices of mortgage backed securities moving sideways near record highs and mortgage rates holding steady near six month lows. MBS traded in a very narrowing range as the week progressed which allowed lenders to publish base 30 year conventional mortgage rates in the 4.625% to 4.875% range. While the week ahead is holiday shortened in observance of Thanksgiving, there is still plenty of data to take note of...housing data specifically. With MBS prices near record highs and mortgage rates near six months, I continue to advise clients and readers to lock. ...

Last week consumers who were floating loans watched mortgage rates rise almost 0.25%. After touching five month lows in the previous week, better than expected economic data and corporate earnings reports pressured prices of mortgage backed securities lower which resulted in lender's raising the par 30 year mortgage rate to 4.875% (at best) . To remind readers, as MBS prices move lower, lenders offer higher mortgage rates. The biggest concern for higher mortgage rates in the week ahead is largely a function of the communications from the Federal Reserve. Unless the Fed openly implies they will begin raising short term interest rates in the near future, which would be a factor of an improving labor market or increased inflationary pressures, we expect mortgage rates to remain near current levels in the week ahead. ...