What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained 59 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move lower.
Mortgage backed securities set a new all-time record on Wednesday but by Friday's close we had pulled back -31BPS from that record high.
Mortgage rates move in the opposite direction of MBS, so mortgage rates set a new record for an all time low on Wednesday but it was very brief.
We had our highest mortgage rates on Friday and our lowest on Wednesday morning.
We had some fantastic support for pricing on the back of some very strong demand for the U.S. 10 year Treasury auction. But MBS reversed course Wednesday afternoon after the minutes from the last FOMC meeting were released at 2:00EST.
Traders were looking for some sort of hint about another round of quantitative easing, but for the 4th meeting in a row, the Fed gave no indication that QE3 was on its way.
As a result, bonds sold off from their highs and mortgage rates move off of their historic lows.
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