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Although the economic calendar isn't jammed packed in the week ahead, the data and events on the ballot carry more potential to move interest rates. We have two important housing releases on Tuesday and Wednesday followed by the FOMC monetary policy decision on Wednesday. After that we get a view into consumer demand with Durable Goods Orders and final revisions to first quarter Gross Domestic Product. Also in the mix are three Treasury auctions and the release of new housing policy strategies from the Obama Administration. ...

S&P, the ratings agency, downgraded Greece's government debt to junk status earlier in the day. This was an unexpected event and resulted in stocks selling off and the bond market rallying. Lower benchmark Treasury yields helped mortgage-backed security prices rally enough to allow lenders to reprice for the better...

Treasury yields did move lower today and MBS prices rose which has allowed lenders to offer better pricing. With that said, I continue to favor floating. Yields have risen considerably in a short time period and appear ripe for a correction… but that will depend on upcoming data and the auctions this week. I do feel it is worth the risk to see what develops....

Reports from fellow mortgage professionals indicate lender rate sheets to be similar to yesterday afternoon’s. This keeps the par 30 year conventional rate mortgage in the 4.75% to 5.00% range for well qualified consumers. To secure the par rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you are looking to access home equity, you should expect either a higher interest rate or additional fees. Despite MBS prices holding near the top of the recent range, I will continue to caution floating in the near term. We have some high impacting events approaching, the Treasury Refunding announcement tomorrow morning, the FOMC statement tomorrow afternoon, and the Employment Situation Report on Friday. These events have the potential to move rates considerably. Always remember, rates move higher faster than they move lower. Consumers closing in the near term have more to risk than to gain by floating. ...

Mortgage rates were mostly unchanged yesterday as the economic calendar was empty and the market settled in for another FOMC statement. Prices of mortgage-backed securities did manage to move marginally higher following a successful auction of 2 year Treasury notes, which saw the highest demand in over a year. The small price appreciations led to scattered reprices for the better as secondary market gains held into the close, however it should be noted that reprices were not significant enough to lower the par conventional 30 yr mortgage rate. ...

It was an up and down week for mortgage backed securities last week. Despite better than expected economic data, MBS didn’t give up too much ground and mortgage rates did manage to dip to 4.75%. However by week’s end, rates had risen to 4.875% for the best qualified consumers. To remind readers, mortgage rates are determined by the trading of mortgage backed securities. As the price increases, lenders can generally pass along lower mortgage rates. As prices fall lenders offer higher mortgage rates which returns a greater yield to the end buyer of the MBS....