Mortgage Pricing Update: 1/31/2008

As expected, the MBS is trading higher this morning (approx. 25bps) while the 10 Year is reacting much the same.  Historically, this is what has happened throughout the years; the Fed cuts rate and for the first day or two after, the bond market does very well.  However, the following week after, the bond market is suffering significantly.

 

With regard to economic reports, today is absolutely topped off with high impact publications!  In total, 4 reports which include: 1) the “Business Barometer” (Chicago PMI), 2) the Personal Consumption Expenditures and Core PCE, 3) the Employment Cost Index, and 4) PCE for December.

 

Overall, given the history of what has happened with rates, I would float until this afternoon.  I will keep you updated on any market trends throughout the day, but things look good for now to float.  Stay tuned for some more updates.

 

12:15 – Drop from 25bps up to 12bps up (could see a potential reprice for the worse this afternoon)

1:45 – Drop from 12bps to 9bps.  The pricing change this afternoon is almost a certain at this point.

Day End – Increase from 9bps up to 25bps up.