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A steady rally in benchmark Treasury yields yesterday helped prices of mortgage backed securities move to five month highs which allowed lenders to keep mortgage rates near five month lows. The major event that took place in the rates market yesterday was the Treasury auction of $20 billion in 10 year notes. Demand from investors was very strong which contributed strength to the move higher in MBS prices. Since the price gains were consistent into the close, a few lenders did reprice for the better. ...

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....