2/23/10

Most rate prices improved today as mortgage bonds rally along with Treasuries off of worse than expected consumer sentiment data released this morning that has the 10-year yield back down to 3.72%. Not surprisingly, stocks are lower with the Dow down 75-points at the moment. Many analysts are indicating they do not think mortgage rates will jump right after the Fed stops buying at the end of March. Many believe private money will come in—although they do admit spreads with Treasuries will have to widen somewhat—and take up the slack, somewhat due to the Fannie and Freddie impending buybacks that will given investors capital to reinvest in mortgages. The two main drivers of rates post Fed will be where the Treasury market is (as mortgages are relative to them) and at what time and pace the Fed decides to start selling all those MBS is has purchased. Time will tell…