New Home Sales hit a 5 yr. high in June.  The seasonally adjusted rate is just a small piece of the housing, resulting in the report not having the impact it once did. However, any positive economic news will apply pressure to pricing.

The sell off of MBS's has accelerated in response to the Flash Eurozone PMI increase.  MBS benefit from European weakness, so the positive economic expansion has resulted in the sell off of U.S. Bonds.

The 5 yr. Treasury Note auction resulted in weaker demand, which applied pressure to MBS's, driving pricing down.

Durable Goods Orders were much stronger then expected, resulting in a sell of of MBS's.

The Initial Jobless Claims came very close to expectations, but was still below the 350K benchmark.

The primary momentum shift in pricing resulted from the Wall St. Journal article "speculating" that the Fed would provide longer term guidance and would not rush to increase rates.

"A word of caution", yesterday's rally was not rational and we do not recommend floating.  Guidance is completely separate from the Fund Rate management.

Consumer Sentiment Index was stronger than the last report.  This positive shift will likely have a negative result for bonds.

ADVICE: LOCK
Contact a mortgage professional that can get you the best pricing for your loan transaction.

- Michael Corboy
www.specialtyfinancialmtg.com