Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) gained +33 basis points from Monday's close which caused 30 year fixed rates to move slightly lower. It was our second straight day of +33BPS gains. The Case-Shiller Homer Price Index was a tad higher than market expectations (12.1% vs est of 12.0%). This is not a report that can impact your pricing this morning. Consumer Confidence was also better than expected (81.5 vs est of 80.0%). But both of these reports were overshadowed. We had two stories that provided a lift to MBS. First, Syria continues to grow as a concern among traders. If military action escalates it will provide a large amount of instability and uncertainty in the region and will cause (as all military conflicts do) a rush to the safe haven of our boring bonds. Secondly, its our debt ceiling. Treasury Secretary Jack Lew stated that we would hit our debt ceiling in October which is sooner than market had forecast. The last round of talks ended in our sequester and traders are concerned that the President and Congress are just as dysfunctional now as they were last time. As a result of the escalation of concern over a probable military strike in Syria, MBS reached their best levels of the day at +40BPS at 2:00EDT. We had a 2 year U.S. Treasury auction. Results: $34 billion at 0.386% with a bid-to-cover ratio of 3.21 vs. the recent avg of 3.48. As we have discussed, this is too short of a term to impact longer bond prices.