THE BASIS POINT

Can Mortgage Rates Actually Improve?

 

Can Mortgage Rates Actually Improve?
Although we receive a break from the auctions this week, on Thursday the government announces the schedule for next week right ahead of Friday’s unemployment data. And of course tomorrow is the last day of the Fed purchase program – we end with the current coupon mortgage yield, spread to the Treasury’s 10-yr, in the high 50s, near the all time lows. Believe it or not, if mortgage supply drops by much, and demand is decent, we could actually see mortgage rates improve relative to Treasuries.

Regardless, the markets were pretty quiet yesterday, with both stock and bond markets improving a little. There is no government-sponsored economic news this morning, but at 6AM we do have the S&P/Case-Shiller Home Price Index, and at 7AM we have Consumer Confidence. Ahead of those we find the yield on the 10-yr sitting at 3.85%, and the 5-yr Treasury and mortgage prices about unchanged from Monday afternoon’s levels.

Daily Humor
John is out with his friends and stops by his grandmother’s house for a visit.

There’s a bowl of peanuts on the coffee table, so John and his friends start snacking on them.

When they’re ready to leave, his friends say, “Nice to meet you, ma’am, and thank you for the peanuts.”

Grandma says, “You’re welcome. Ever since I lost my dentures, all I can do is suck the chocolate off of them.”

 

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