Market Insider
Yesterday's strong rally in the bond and mortgage markets may have been a little too much too rapidly. This morning treasuries and mortgages are lower in price; at 9:00 the 10 yr note -8/32 at 3.09% +3 bp and mortgage prices -5/32 (.15 bp). The 10 yr note playing with its 200 day moving average at 3.08% closed yesterday at 3.06%; the 4.0 June 30 yr FNMA coupon broke its 200 day average nicely but as long as the 10 isn't holding neither will the mortgage market.
April pending home sales from NAR, contracts signed but not yet closed, was expected to have declined 1.0%; a huge shock, pending sales fell 11.6% and were down 26.5% from April last year. The reaction to the data rallied the 10 yr back to unchanged and mortgage prices back to unchanged from -4/32 at 9:30 this morning. NAR it the nail squarely, it blames a lot of it on very tight underwriting. In our view underwriting is not just too tight it is absolutely ridiculous.
Comments(1)