Record Highs Lead to Sell Off...

Yesterday we broker through and set record highs for the mortgage backed securities market. Inevitably there have been profit takers this morning, bringing our market back down below recent resistance levels, the same levels we finally broke through yesterday.

Despite this rates are still very favorable. 4.25% is the conforming 30 year fixed rate today with an APR of 4.532%. Looking for a no cost loan, currently we're able to offer 4.875%, for a 30 year conforming with an APR of 4.875%

At first look this graph is pretty ugly... but considering where we are and where we have come from, a sell of of this magnitude is not the end of these low rates. In fact if you have been reading, you're well aware of settlement which is approaching quickly. Settlement which occurs Monday will roll offered rates into the July coupon, which is currently trading lower... investors recognizing this are cashing in on the expiring coupon and taking profits. This is business as usual, a point I make so no one panics. The red dotted line represents the current line of resistance which as you can see in still in effect... This daily snapshot looks a little ominous... let's look at a five day graph which puts things in better perspective. You will find it below.


This graph clearly represents just how healthy our market is right now. All things considered with our economy still teetering and investors looking for somewhere safe to keep their nest egg, we seem to be one of the favorite shelters.

With that said if this sell off continues you can expect reprices for the worse later today.