So what the heck is going on in the mortgage bond market this morning? To start with, the initial jobless claims came in 10K higher than expected at 290K. While this is positive for the benchmark bond, it's not that big of a miss and the overall claims are still good as far as the economy is concerned - anything below 300K is good. The fact that New York Fed President Dudley spoke this morning and expressed his thoughts that the Fed should wait to raise rates is probably the biggest impetus as to why we are experiencing some buying of the benchmark bond which is good for rates.
From a technical standpoint, the benchmark bond is really looking for direction. The economic date from Europe is horrible and investors aren't really confident in a recovery (especially as far as jobs is concerned) over here but the stock market continues to set record highs nearly every day as of late so there is confusion on whether to buy or sell. Yesterday the bond buying started off strong but the sellers won the day with the benchmark bond closing down 10 basis points. This morning we saw a moderate open which then sold off and is now flirting with the 1st level of resistance again. Rates continue to be great and it's always a good time to lock when bond prices are up. Here's the chart:
Is the 3% down payment conventional loan coming back? While nothing has been announced, there was an article in housingwire.com talking about how the U.S. Mortgage Insurance trade association believes that the 97% LTV conventional loan is a good loan and should be available to the home-buying public. They give four reasons as to why they believe this - they left out the obvious 5th reason - more profits for them. Here's the article: Low down payment home loans.
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