Yesterday mortgage backed securities (MBS) managed to close slightly higher on the day which has helped lower borrowing costs a few basis points today.  This should keep par 30 year fixed rate mortgages in a tight range between 4.5% to 4.75% depending on the lender's position within the mortgage supply chain. Lenders needing more volume will price a little more aggressively while lenders with overflowing pipelines will price a little higher.  For consumers looking for 15 year mortgages expect to get a par rate between 4.25% and 4.50%.   Remember not everyone who applies for a mortgage will receive the benchmark mortgage rates that I quote. To qualify for the most aggressive interest rate a borrower must have 740 credit score, a low loan to value, and will most likely end up paying all closing costs including an point.  


So far today mortgages have been taking their lead from Treasury yields.  Read More Here.  Economic data was a nonfactor for rates this morning, but nonetheless important information to digest. Especially when data is housing related!


The S&P/ Case Shiller home price index tracks monthly changes in home prices across the United States. The release of the data indicated, in January, home prices averaged a 2.5% drop from December.  The survey shows, since last January, home prices have fallen a record 19%.!!! The largest declining market is the Phoenix, Arizona market which year over year home prices have fallen 35% and Las Vegas gets a runner up at a 32.5% decline.   This report continues to show that home prices are continuing to fall and have not reached a bottom.   With the summer months approaching which is the busiest time for real estate transactions, hopefully this trend will start to turn.  Of note I found it interesting that last week the FHFA Housing Index showed an increase of 1.7% in January.


Chicago PMI and Consumer Confidence numbers were also released this morning.  Chicago PMI came in at 31.4 ; economists were expecting a 35.0 reading; so much lower than expected.  Consumer confidence was expected to come in at 28.0, instead markets were surprised to see a reading of 26. Economists were expecting confidence to rise given the newly announced details of government plans intended slow the pace of economic contraction. Perhaps this is a sign that protectionism will continue?  After the release of both pieces of data markets showed no reaction. Not a big surprise considering it is month end and quarter end and most investors already have their money in safe assets.


Early reports from fellow mortgage professionals are indicating rates are mostly unchanged from yesterday.   For more rate sheet consideration's Adam discusses end of month activities at mortgage operations centers in this BLOG MBS Commentary.