Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) lost -35 basis points from Friday's close which caused 30 year fixed rates to move upward. In fact, yesterday's sell off completely erased all of the prior week's improvement. MBS sold off immediately after the release of the ISM Manufacturing data. The market was expecting a reading of 54.0 and it came in at 55.7. A reading above 50 shows economic expansion (which is negative for your pricing) As a result, the benchmark FNMA 4.0 September coupon "tanked" to their worst levels of the day of -63BPS at 10:36EDT. Construction Spending was also better than market expectations (0.6% vs 0.3%) which was also negative for your pricing. But MBS climbed off of their bottom and started to regain some (but not all) of their early morning losses, rising from -63BPS to -39BPS on news that the Republican House Leader would support any action by President Obama against Syria. This temporarily gave some momentum to the speculation that Obama will get the support he needs from Congress and then launch a strike against Syria.

Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) gained +22 basis points from last Friday's close which caused 30 year fixed rates to move slightly lower from the prior week. We had a very positive week for domestic economic data. Durable Goods Orders, Consumer Confidence, Consumer Sentiment, and GDP were all better than expected and showed some nice levels of growth in our economy. Normally, this would cause rates to rise because rates do go up hand-in-hand with economic growth. But instead, rates moved lower...why? This was due to solely to concerns over a U.S. military strike against Syria. Any military action always caused a "flight to safety". This is where domestic and international traders "park" their money in the very low-return but very safe U.S. bond market while they wait out any potential volatility due to the after effects and unintended consequences of any forceful action. This causes a temporary spike in demand for our bonds which in turn, lowers rates. But this type of improvement is only temporary.