Friday 1/23…No Data Today

Today we get no economic data that will move the markets.  Yesterday, mortgage backed securities closed slightly higher and so far this morning we are holding onto those gains.  Yesterday the Federal Reserve released their weekly numbers on the Fed mbs purchase program.  If you can recall, and a big reason why rates have moved lower, the Federal reserve announced last year that they would spend up to $500billion on mbs starting in January.  They release a report weekly on Thursdays to update how much and what mbs they bought.  So far, the Fed has purchased $53billion, leaving them with just under $450billion more to spend.  With that money, we should see rates continue to stay low for quite some time. 

Next week the economic data does pick up with the release of existing home sales and leading indicators on Monday.  On Monday’s blog I will update you with the rest of the week’s data with the biggest impacting reports on Wednesday and Thursday.   

As I have been typing this update, mbs have sold off slightly(nothing to worry about, yet).  It appears that treasuries are under pressure again today and they are dragging mbs with them.  As most readers will know, mortgage rates follow the price of mortgage backed securities and not treasuries; however, they are both fixed income investments and thus they do trend in the same direction.  It appears today that mbs will follow the direction of treasuries but not to the same degree.  Yesterday, treasuries sold off big time in the morning then rallied late day but still closed in negative territory.  Hopefully, today will follow that same trend a sell off in morning then a late day rally.  If you are closing within the next week, I would advice that you go ahead and lock now.   For closings next month, I would suggest that you float if you can tolerate the risk.  As I have said many times before, it is always better to lock when you should have floated then it is to float when you should have locked.