Prices of Treasuries and Mortgage Backed Securities (MBSs) (rates down!) as well as stock prices have been climbing the past couple of days.
Yesterday, China reported that their exports fell last month, and adds to the growing evidence that the global economic slump is getting worse.
There was a strong foreign demand for the 30-Year Treasury bonds that were auctioned earlier today. This will help keep the prices of bonds and mortgage backed securities up and their yields (and mortgage interest rates) down.
According to the results of the Primary Mortgage Market Survey released by Freddie Mac, mortgage rates edged slightly lower during the week ending March 12th. "Mortgage rates had room to ease this week following news of a weaker jobs market, which may slow consumer spending and keep inflation at bay," said Frank Nothaft, vice president and chief economist at Freddie Mac. "The 30-year fixed-rate mortgage rate remains very close to January's all time recorded low of 4.96%."
The rate of homes falling into foreclosure rose 30% in February despite the government's efforts to help prevent homeowners from losing their homes. And, lenders own as many as 700,000 foreclosed homes that have not yet been put up for sale. This could lead to a continuing drop in home values as these homes are evetually put on the market.
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