With so many variables to consider - employment, sovereign debt, political rang lings’, and on and on - managing interest rate risk and helping our borrowers with their decisions on Austin mortgage rates is very hard to handicap. Best advice is to use any rally to lock your interest rate in!
Best to take advantage of current mortgage pricing with such low odds of improvement in the cards. Currently, we’re trading 3.73% with the extremes at 4.62% and 2.0%. Lots of room to run (either way) as the economic picture changes.
If we can break through resistance at 117-31, I think we have a nice chance to climb higher (better rates) but if we see a close down around that 117-13 level, I think you will see us trading down to that 50% level at 116-295.
Let’s call the market neutral but easily influenced by a number of cross winds. A trade above 3.61% on the 10 year note will tell you the bull has left the barn!
Overall, we like the market if for no other reason that investor fear will keep a bid in treasuries which in turn will support mortgage backed securities. Just remember that directional changes can be like playing “crack the whip.” Most probably outcome will be a triangle formation on the 10 year note chart, keeping mortgage pricing in a fairly tight range until the new year.
16 billion of 30 year bonds changed hands at a yield 4.469%, bid to cover 2.26 to 1 (average 2.45 to 1), indirect bidders took 44% of the paper, and the final yield on a price weighted basis created a 3.5 bps tail (not so hot). Overall, we’ll give this one a C. Fast money traders sold the market post auction but currently, we are making a comeback. Mortgage levels are now unchanged from pre-auction levels with only the 30 year note underwater (down 11/32’s).
Weak dollar, higher oil, new high in gold, stocks near unchanged, and bonds doing a little better. We’re feeling a bit like Bill Murray in “Groundhog Day”. Same trade just a new day. One memorable line from the movie; (Phil) Do you know what today is? (Rita) No, what? (Phil) Today is tomorrow. It happened. In a nut shell, what we have here is too much money chasing too few assets that are worth owning. Throw in a mixed bag of economic data and a seasonal supportive 4th quarter (for fixed income), it’s hard to see much of a change in Austin mortgage rates into year end.
Bonds and MBS have firmed a bit on the heels [...]
From our technical view, the chart looks more like “crack the whip” than any type of symmetrical trading. Last Friday caught a bid from month end buying (portfolio extension needs), Monday gave it all back as stocks traded and closed above 1000 on the S & P chart, and today’s rally has been derailed by Pending Home Sales.
To borrow from the great Winston Churchill: I cannot forecast [...]
