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.

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 -39 basis points from Tuesday's close which caused 30 year fixed rates to move higher and completely wiped out Tuesday's gains. Pending Home Sales disappointed, coming in at -1.3% which was worse than the consensus estimates of about -0.9% to +0.2% range. MBS were down -32BPS prior to the release of this report. And it was not enough off a disappointment to reverse MBS's downward trend. 5YR Treasury Auction results:$35 billion at 1.624% with a Bid To Cover 2.38 vs avg 2.74. This represented a pull back in demand compared to the last 10 auctions and provided a little more downward pressure on MBS. MBS essentially gave up a portion (but not all) of our "fear factor" rally that is due to concern that military action may escalate between Syria and the U.S. But as it is becoming clearer that White House will take more time for tests and confirmation to come in before deciding on which course of punishment (if any) will be dealt out to Syria, some of the temporary "fear factor" demand has pulled back causing your rates to rise.

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 +33 basis points from Monday's close which caused 30 year fixed rates to move slightly lower. It was our second straight day of +33BPS gains. The Case-Shiller Homer Price Index was a tad higher than market expectations (12.1% vs est of 12.0%). This is not a report that can impact your pricing this morning. Consumer Confidence was also better than expected (81.5 vs est of 80.0%). But both of these reports were overshadowed. We had two stories that provided a lift to MBS. First, Syria continues to grow as a concern among traders. If military action escalates it will provide a large amount of instability and uncertainty in the region and will cause (as all military conflicts do) a rush to the safe haven of our boring bonds. Secondly, its our debt ceiling. Treasury Secretary Jack Lew stated that we would hit our debt ceiling in October which is sooner than market had forecast. The last round of talks ended in our sequester and traders are concerned that the President and Congress are just as dysfunctional now as they were last time. As a result of the escalation of concern over a probable military strike in Syria, MBS reached their best levels of the day at +40BPS at 2:00EDT. We had a 2 year U.S. Treasury auction. Results: $34 billion at 0.386% with a bid-to-cover ratio of 3.21 vs. the recent avg of 3.48. As we have discussed, this is too short of a term to impact longer bond prices.

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 just +8 basis points from Wednesday's close. Which caused mortgage rates to move sideways. he FNMA Benchmark 4.0 MBS has traded in a fairly narrow range all day with only a 20BPS spread between our highs and our lows. Initial Weekly Jobless Claims came in at 336K which was higher than the consensus estimate of 322K. Plus the prior week was revised slightly higher. Still, the more closely watched four week moving average fell another 2,250. While this report did come in a little higher than expected (and that would normally be good for pricing), it was still below 340K and the prior revision wasn't as bad as some expected. The Leading Indicators were released at 10EDT and came in close to market expectations (0.6 vs est of 0.5) and did not have an impact on pricing. The continued concern over a Fed tapering in September kept pressure on MBS all day. We tested our new floor of support twice and it did hold both times which has kept MBS from selling off further.

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 +62 basis points from Monday's close. This almost erased Monday's sell off of -68BPS, so far this week the net effect is that pricing is moving sideways. It was our second straight day of no major economic reports or Treasury auctions yesterday to guide traders. MBS moved upward right out of the gate, recovering some lost pricing after Monday's big sell-off. The reason for this? A temporary surge in demand from the emerging markets as fear of a Fed taper and subsequent higher U.S. rates, has the emerging markets scrambling to lock in some lower rates for their governments.

Mortgage Rates

Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) lost -68 basis points from Friday and closed at their worst levels of 2013 which means that you saw your highest rates of 2013. MBS started the day selling off (worse pricing for you) as speculation among bond traders that the Fed would begin tapering their monthly MBS purchases on Sept 18th continued to mount. There were no economic release or Treasury auctions. Once again, the stock market and bond market moved in the same direction (both sold off). If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.