Mortgage Backed Securities MARKET UPDATE

January 24th, 2013

Interest rate

I wanted to share today’s update from MBS Online, which is the service that I use that tracks mortgage-backed securities, which is the best gauge of what the interest-rate market is doing.

Here is this morning’s update:

“Stronger than expected labor market data hurt MBS this morning. Weekly Jobless Claims fell to 330K, below the consensus of 360K, and the lowest level since January 2008. This marks the second straight week that Jobless Claims were below the 350K level, which may signal that stronger Employment gains will be seen. The Dow is up 50 points. Leading Indicators will be released at 10:00 ET.”

My take on this is that this is one more slight signal that puts the bond market and mortgage-backed securities under pressure, and is another small bit of data that has helped to push up interest rates lately.

The 10 Year T-Bond has jumped from 1.83% yesterday to 1.86% this morning. For mortgage consumers this can mean a slight increase in points, but not necessarily rates, or if the negative news continues then rates may increase 1/8%.


“MBS are down -10/32 (FNMA 30-yr 3.0 at 104.02), around 6/32 below morning levels, and at the low for the day. Unfavorable repricing took place. Stronger than expected Jobless Claims data caused MBS to move lower today. Manufacturing data in Europe and China also exceeded expectations. Leading Indicators rose 0.5%, matching the consensus. The Dow is up 50 points. The S&P 500 index crossed above the 1,500 level for the first time since December 2007. Tomorrow, New Home Sales will be released at 10:00 ET.”

Keep your eye on this blog for more news soon, but this seems to be the year that many people think that interest rates will rise. Let’s see if the news and the data cause that to happen.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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