Market Analysis

Today we benefited from the combination of weak manufacturing reports from the Mid-Atlantic and New York regions (although the Mid-Atlantic activity was down less than expected), a lack of supply of new US Treasury bonds hitting the market (Uncle Sam is not raising more money until the 3rd quarter) and the government paid out $74 billion to holders of maturing 3-, 5-, and 10-year Treasury notes together with $17.7 billion in interest on outstanding notes and bonds. This flood of money being paid to investors with the lack of new supply on the market created upward momentum for existing mortgage-backed securities and US Treasury's driving their prices higher and yields lower as investors looked for places to park their $90 billion pay out. It is probably overly optimistic to believe that the Fed will cut rates again, although some in the market are hoping for that. It is safer to assume we have a short term rally that we hope will last for a couple more days. Our position right now for those borrower's who are not adverse to risk is to cautiously float but to be ready to lock once this rally runs out of steam, which could be as early as tomorrow but hopefully will carry through Monday. If you would like to be ready to lock with us, the first step is to be pre-approved. You can access a short application form at http://www.ironharbor.com/xSites/Mortgage/IronHarbor/Content/UploadedFiles/Iron%20Harbor%20Short%20Application.pdf .
Posted by Matthew Breston on May 16th, 2008 5:35 AMPost a Comment (0)
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