Mortgage bonds are lower this morning, backing off the highs reached yesterday. After a 130-basis point gain without a correction, it would be a healthy move for bonds to take a breather before resuming their climb higher.
Today’s news has been mostly bond friendly, with Pending Home Sales falling 1% lower in February, which is well off the 0.7% gain the market anticipated. In addition, the final 4th quarter 2018 GDP report showed a growth rate of 2.2%. Although this modest gain isn’t terrible, it is a sharp drop from the 2.6% rate previously reported.
The 10-Year Treasury Note yield is holding at 2.377%, which is still beneath the support at 2.41%. If yields don’t tick above the ceiling, there is still plenty of room for yields to drop even further.
With bonds showing signs of a pullback, it will be a good time to lock for those needing to close soon.