Yesterday, AQ discussed the recent rapid selling in the bond market potential soon giving way to some stability after the massive "washing out" of that sell-side momentum.  Indeed today we may have seen the first signs of a shift.

After recapturing some of the losses from yesterday, it was right back into sell mode as prices hurtled disturbingly toward even lower prices than yesterday.  Not good for rate sheets...  But just before mid day, and very near the lowest levels of the past two days, bonds including MBS and US Treasuries began showing signs that they had had enough selling!  What followed was a moderately paced and exceedingly stable run back up over the highest levels of the day.

To put this in perspective, we now sit roughly at the midpoint between yesterday's highs and lows.  This amounted to just under half a point in price on the 4.0 MBS coupon and was more than enough to prompt several lenders to reprice for the better.

Could this be the beginning of some relative stability that we're expecting to show up some time soon?  Unequivocally: MAYBE!  It's too soon to tell how strongly the recent lows will hold.  But for sure, it's a promising sign to see the violent lows from yesterday coincide with today's only slightly less violent lows.

The moral of the story is that any attempt to "play the market" in order to wait it out for a better rate should only be undertaken if one understands the risks.  The biggest of those risks is quite simply that today's glimmer of hope is temporary.  It would not surprise us to see a 10yr treasury note closer to 3% or slightly over that before enough of the selling pressure had been exhausted.  But when and if that happens, borrowers may well continue to see mortgage rates available in the low 4% range. 

Reports from loan officers today indicate that the 4.25-4.5 range from yesterday has, at most lenders, given way to a 4.125 to 4.375 range today.  The longer the market is able to hold yesterday's and this morning's lows, that could even morph into a 4.0-4.25 range without any additional gains.  But indeed if those lows are held, additional gains are likely.

Important Mortgage Rate Disclaimer:  Loan originators will only be able to offer these rates on agency conforming loan amounts to borrowers who are have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as:  third party fees +  title charges  + transfer and recordation + escrows (things like upfront MIP (if required), property taxes, homeowners insurance, accrued interest)".