Mortgage bonds closed higher yesterday and continue to support the existence of an upward channel. This is an encouraging sign and could signal continued
improvement in the days to come. Since bonds are yet to make a decisive break out of the nasty downward channel that drove mortgage rates higher,
every day that bonds close higher is a step in the right direction. With bonds now battling their 25 day moving average, today could be a critical
day in the fight to keep bonds on a healthy path. There is a strong likelihood that we will see a fairly significant move in one direction or
another in the next few days. Watch closely and hope for a breakout to the up-side.
Positive housing news continues to dominate the headlines. Today it was announced that Pending Home Sales were up 3.4% for the month of April.
Since we are now entering the season of home buying, this is a good sign that we will be in for a strong housing market this summer.
Weekly Unemployment Claims for last week were reported to be 282k. Although higher than expectations of 270k, this is a still a strong report and
provides additional evidence that our job market is improving.
With mortgage bonds showing signs of an upward channel, there is no rush to immediately lock. However, if you choose to float, watch the markets
closely. Sentiment can change quickly and bonds are still susceptible to significant downward movements.