o_Rates improved in trading this morning as mortgage bonds eked out some gains against Treasuries, helped by growing Euro sovereign debt fears in a flight to the relative quality of the debt peddled by our government. Treasuries are rallying given month end buying and lack of supply (no auctions) further boosted by the Federal Reserve buyback (QE2) of $6.8 billion this morning. Mortgages however are lagging and are not benefitting fully from these gains that pushed the 10-year yield down to 2.759% at the moment as hedge fund/money managers sell lower coupons. Stock market indices were down significantly to start today’s session but have since pared some losses after better than expected consumer confidence and business expansion data offset worse than expected home price figures. Tomorrow brings the start of employment data along with housing market and manufacturing figures…expect rate/price volatility.
In the news today…
- Home Prices Fell Compared to Forecasted October Gain
- Businesses in U.S. Grow at Faster Pace Than Forecast
- Consumer Confidence in U.S. Rises to Five-Month High
- Milwaukee Purchasers Manufacturing Index for November Rose
- EU Faces More Bailouts as Irish Contagion Spreads: Is Spain Next?
- Spanish Banks Face Funding Hurdle Amid Bailout Threat … crisis looming
- Banks Resisting Fannie, Freddie Demands to Buy Back Mortgages
- Bank of America Mortgage Morass Deepens After Employee Says Notes Not Sent
Recommended Reading….
- Atlas Shrugged by Ayn Rand
Your Takeaway for Today….
- 30 year fixed rate mortgage has a lower interest rate than a 30-year Treasury bond. Rates will never be this low in a very long time if ever. Motivate you recalcitrant borrowers with this knowledge and tell them that NOW is the time to lock in a historically low 30 year fixed rate mortgage before this distortion is corrected by “Mr. Market”.
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