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Following the release of Industrial Production data, stocks extended overnight gains and benchmark interest rates rose. This pressured mortgage backed securities prices lower...before most lenders published loan pricing. Consequently, consumer borrowing costs increased slightly today. The losses were not large enough to say the par 30 year fixed mortgage rate moved higher though. We don't see today's sell off as a major cause for concern yet, but still feel anyone floating their loan within 30 days of closing should lock. We will alert if the tide turns......

Mortgage rates looked like they were going to move up today as stocks were indicated to open higher before the lenders published rate sheets. However it wasn't long before stocks lost momentum and a flight to quality led benchmark Treasury yields lower. This helped mortgage-backed security prices rally from early session lows and resulted in multiple lender reprices (one for the better, then one for the worse, then one for the better again). ...

The Federal Open Market Committee (FOMC) met for a one day meeting today. Usually they meet for two. At 2:15, the FOMC released their statement on monetary policy. The statement was very similar to the FOMC statement released after the January meeting. They reiterated the need for low rates for an "extended time" and that inflation is not a concern today. There were two changes made that relate to housing. First, the verbiage referring to the MBS Purchase Program, which is scheduled to run out of funding at the end of March, added what may be a door to extend the program in some capacity. Additionally, the Fed inserted a few words that imply they are concerned about the health of housing, stating: "Housing starts have been flat at depressed levels". This adds some hope that the Fed may need to add funds to the MBS Purchase Program if mortgage rates move higher following their withdrawal at the end of March. HOW DID MORTGAGE RATES REACT TO THE FOMC STATEMENT???...

While it is widely accepted that the Fed will keep the current Fed Funds rate at 0 to .25%, many market participants are hoping for minor changes to the text, specifically the rhetoric which gives a timeline on current Fed Funds rate strategy: rates will be low for an “extended period”. Most want to see the Fed provide a clearer outlook on when to expect an interest rate hike. Others expect the Fed to be slightly more upbeat about the economy and more defensive of inflationary pressures. We are looking for limited changes as Bernanke is not likely to spook the markets in an illiquid environment. In the short run, AQ says the recent trend of rising rates may be due a short term correction if the Fed sends a more downbeat economic message and re-iterates that inflation remains subdued due to considerable "resource slack" in the economy. More than anything, we do not want to hear that inflation concerns are growing at the Federal Reserve, this would be the worst case scenario for mortgage rates....

Reports from fellow mortgage professionals indicates that rates are unchanged from yesterday. This keeps the par 30 year conventional rate mortgage in the 4.625% to 4.875% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you are seeking to access equity in your home, you should expect either higher closing costs or a higher interest rate. Is everybody that is closing in the next 30 days locked yet? ...

It was a bumpy ride in the mortgage backed security market yesterday. At the open, MBS moved considerably higher and lenders that issued rate sheets at 9am, passed along considerable improvements from the prior day; however, the gains did not last long. Most lenders issue rate sheets around 10am eastern and by that time, MBS had given back all of the early morning gains which lead to the lenders that issued rate sheets early to reprice for the worse. As the day progressed though, MBS did manage to move higher and by the close many lenders repriced for the better. All in all, mortgage rates held steady on the day. ...