Mortgage Market Commentary

Mortgage Market Commentary

Mortgage backed securities (MBS) prices are lower (rates higher) paring yesterday's gains on concern the government's plan to rescue financial institutions, boost the economy and service a record budget deficit will require increased sales of debt. More debt causes rates to rise, including mortgage rates. FNMA 4.5% coupon 100.55bps, -12bps. Pending Home Sales fell 7.7% in January as a lack of credit and record foreclosures that are pushing property values down keep prospective buyers out of the market. Falling prices and lower borrowing costs have brought more homes within reach of buyers, however. Pending home sales are considered a leading indicator because they track contract signings. Fed Chief Bernanke and Treasury Secretary Geithner will be speaking today and investors are hoping for further details about government programs.