Mortgage Rates Poised to improve 5/26/11

Today news brings us some likelihood that rates could take a slight improvement (go lower).

GDP -Second Estimate: Actual 1.8%, prior 1.8%
(Consensus 2.0%)
GDP Deflator - Second Estimate: Actual 1.9%, prior 1.9%

Initial Claims: Actual 424K, prior 409K (Consensus 400K)

With GDP numbers coming in a little lower than estimated and seeing the sideways trading pattern we have been in for about a week or so I think we are now poised to see some gains. Today we still have the 7yr auction to confirm this but considering the 2y and 5y went well on Tue and Wed this week we should see more of the same.

Market closed right in the middle of the trading range I called yesterday at 100.25 (FNMA 4.0).

Today brought us a small +6bps gap up and I think we can see us elevate to my called high yesterday of 100.65.

The 10Y is also following suit and is currently at 3.11 yield and we could see that fall to 3.08

Lock Advice

If closing 7-10 days - Lock this afternoon

If closing 14+ - float