What's going on and why does it matter?
Mortgage bonds are drifting sideways, although they are still trading in positive territory above their 10-day moving average as the market reopens after a long holiday weekend. Global stocks are in rally mode on hopes for economic recovery following positive economic data in China, Europe, and the US. There are also some encouraging prospects for a Covid-19 vaccine despite an alarming increase in US cases. The economic calendar is light this week, although the Fed is continuing their massive bond-buying program. The Fed is scheduled to purchase up to $4.665 billion of mortgage bonds today while supply has been running around $7.7 billion per day. This means the Fed is currently absorbing over 60% of the new supply hitting the market.
What should you do about it?
Watch and see if mortgage bonds can remain above their 10-day moving average, but be prepared to lock your rate if mortgage bonds fall below that level.
Economic reports that may impact mortgage rates this week:
Topics: Refinance, Interest Rates, Mortgage Interest Rates, home loan refinance, lower interest rate, Corona Virus, COVID-19