Full Analysis

In news, Housing starts were stronger overall led by multi-family starts while single family starts fell by 1.7%.  This report is not a major impact to the MBS market.

The report of concern today is the University of Michigan consumer sentiment survey.  It fell this month to 59.5, the lowest in 28 years.  This data is driving mortgage rates and stocks down this morning.  We've already added 8/32nds to our gains yesterday.  If the curve holds these gains for a few hours, this means that we will be seeing at least a full point (32/32nds) improvement in rates from Wednesday night.  That's a huge improvement and should yet again bring 5.5% PAR within reach.

We'll want to time the market just right today as there is a strong chance of some profit-taking among MBS holders with prices this high.  That means we want to wait as long as possible before locking today.  Once you see your lender give you at least that aforementioned full point improvement over wednesday evening, locking becomes a smart play.  Float until then and keep a watchful eye on stocks, treasuries and this blog.  If the 10 year treasury note price lowers by 10/32nds or more, it's time to lock, BUT make sure you check back here before doing so to confirm treasuries are tracking with MBS.

Until then, cherish your "winning lottery ticket" and guard it safely until you can cash it in.  Happy Friday to you!