Mortgage Rates Up Modestly on Week

Mortgage rates went up slightly this week but it could have been much worse. The benchmark 30-year fixed-rate mortgage rose 8 basis points, to 6.11 percent. The 10 Year Treasury Yield was up on the week by .127% which per recent action would suggest a higher bump up in mortgage rates. Again, as in the previous week, it appears that the mortgage spread is tightening up a bit. It seems that the bond market was filled with new supply this past week and coupled with relative economic data out on the week, was not enough to derail the better risk assessment and rotation out of treasuries.

FHA refinance programs continue to gain in popularity among those with less than perfect credit and those with the need to finance the majority of the equity in their homes. I can understand why, as FHA mortgage rates are almost as good, and sometimes better than prime conventional refinance loans on high LTV scenarios.

In the coming week, Consumer Confidence, GDP, and Unemployment numbers will be released, along with another slew of earnings reports. We'll have to wait and see which way the economic wind blows, and keep an eye on the bond market. If the week is break-even again on the economic front coupled with a flow of investment back in the 10 year treasuries, we could see a dip in mortgage rates this week. But remember, don't predict, just react. Have a great week!

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