Current position: Floating
Stocks are lower, and Mortgage Bonds are trading near unchanged levels so far this morning. We are seeing Mortgage Applications continue to get a little better, and we hope that as rates continue to move lower, they get better all the time.
Mortgage Applications
The MBA released their Mortgage Application data for last week, showing that purchases rose 3% last week and are now down 39% year over year. Activity is starting to pick back up, as this follows a 25% rise in purchase activity last week, albeit from low levels.
Interest rates decreased from 6.23% to 6.2%. Last year at this time, rates were roughly 3.75%, which means rates are around 2.5% higher today. Refinances rose 15% after rising 34% in the previous report and are now down 77% year over year.
Technical Analysis
Mortgage Bonds continue to trade in a well - defined range between support at the 25 - day Moving Average and overhead resistance at 101.671. They may continue to trade in this range until Friday, when we get the Fed's favorite measure of inflation, Personal Consumption Expenditures (PCE).
The 10-year took another run at 3.43%, which has been a very tough floor of support and has prevented yields from improving lower. Once again, a Bond-friendly number on Friday could help create the breakthrough to the downside we have been waiting for. Continue Floating.