Mortgage Interest Rate Update 5.24.12

Mortgage Backed Securities (MBS) have struggled a bit this week.  Yields were up Monday and Tuesday, a bit of a rally as yields dropped on Wednesday and today MBS are selling off as yields are rising.  What does all this mean for mortgage interest rates?  Overall the market has been flat….a little down, a little up but not much movement in mortgage rates.  Considering the turmoil in Europe, the selling pressure in equities, gold and oil I would like to see a bit more buying interest in the MBS market so that mortgage rates could continue to move down however buying interest just isn’t that strong.

The refinance market has been strong with rates at an all time low.  The purchase market is doing okay, but with rates as low as they are and home prices still soft you would expect a bigger pop in the purchase market. The Mortgage Bankers Association raised it’s origination estimates by $200 billion dollars and the Freddie Mac report on interest rates shows stability with interest rates.