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Mortgage Rates Back in Line With 3 Year Lows

Mortgage rates moved lower today as MBS (the mortgage-backed securities that determine the value of mortgages on the secondary market) improved relative to US Treasuries.  That’s NOT a common occurrence recently!  When Treasury yields have moved quickly to long-term highs or lows, MBS tend to lag the move noticeably.  As 10yr yields moved even lower at the start of this week, it would be an understatement to say MBS were underperforming. 
These things happen, however, and the current iteration fits well with precedent.  Previous experience suggests TIME and MARKET STABILITY will help the mortgage market close the gap.  As of this afternoon, Treasuries haven’t made a new low yield for the 2nd straight day.  They’ve also held inside a narrower range on each of the past 2 days (stability!).  MBS took the opportunity to trade just a bit more optimistically than their Treasury benchmarks.  This isn’t a big deal or the source of a major change in rate momentum–just evidence that mortgage rates could eventually move a bit lower if current trading levels in Treasuries can be sustained.
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Source: mortgagenewsdaily.comNew feed

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