Monday's technical pattern was a negative sign for MBS trading, as the rally stalled and failed to close above the resistance level.  Investors are selling off and taking the gains realized from the past two weeks of improvements, resulting in an rate increase for 30 yr. fixed products.

Today's earlier economic data reports has no material impact on pricing.  Today's New Home Sales will be closely monitored, but there would need to be a huge miss to the downside for any pricing improvement to be realized.

The stock market hit a new record, but pre-opening indexes, as well as European and Asian markets are trading lower.

There is presently high optimism that the economy is improving.  The Feds' tapering will be totally dependent on economic data, adding additional significance to each new data report.  No market response was generated by Bernanke's two day testimony.  The debate over tapering continues, will it be September or later?

It is unlikely that rates will decline even if there is any improvement in the 10 yr. note, as interest rates have little momentum to decline as the economic outlook remains positive.

A huge reversal in the stock market, or some kind of turmoil that would instill fear in investors would be required to see any reversal in interest rates.

Today's interest rate levels remain to be very low based on historical numbers.  As there is no solid demand for treasuries or MBS's we believe now is the time to get off the fence and capitalize on the purchase or refinance of your home.

Contact us today for your free rate quote.

- Michael Corboy
mcorboy@specialtyfinancialmtg.com
www.specialtyfinancialmtg.com