Yesterday Mortgage backed securities (MBS) gained +61 basis points from Wednesday's close which caused 30 year fixed rates to move downward slightly. 

After midnight, the President signed the deal and has ordered furloughed employees back to work and the government will now remain open until January 15th and the debt ceiling will not be reached again until February 7th.  So, as you can see...we have a very temporary solution that has a very high probability of more political turmoil at the beginning of the year.
The Senate approved the legislation by an 81-18 vote; the House followed suit by a tally of 285-144, with 87 Republicans in favor and 144 against, breaking an informal rule in which a majority of the majority party is supposed to carry legislation. Democrats unanimously supported the bill, even though it locks in funding at levels required by across-the-board spending cuts known as sequestration. We were supposed to get Building Permits and Housing Starts this morning but that department is not up and running yet.
We did get Weekly Initial Jobless Claims: 358K vs. the estimate of 335K, approximately 70K was due to the government shut down.
MBS rallied throughout the day reaching a high of +73 BPS at 2:30EDT.  The majority of the rally was due to traders' speculation that the Fed will not begin to taper their massive monthly Treasury and MBS bond purchase programs until March 2014 at the very earliest and potentially as late as June 2014.


Today’s Forecast:  It looks like we will end this week on another good note.  The MBS (Mortgage Backed Securities) market is doing well this morning, without much to derail it (other than the Resistance level of 102.00).  Work with your Mortgage Professional to monitor where we close today.  If we can close above that 102.00 Resistance Level, it very well could become a new Support Level, putting us into a new trading range and lead to even better rates.  Floating an interest rate is okay to do as long as you are working closely with your Mortgage Loan Professional and heeding their advice. Be ready to act quickly if the MBS market starts to cool off and retract back to the technical Resistance level of 102.00. 

Remember, if you want to know the benefits of locking your rate today versus floating, simply contact your Most Trusted Mortgage Loan Professional who has access to real time Wall St. data and instant market alerts with breaking news.

-Michael Corboy
www.specialtyfinancialmtg.com