Although it doesn’t look like Fannie 3.5’s will add more than a tick or two onto the all time high levels that have provided such a firm ceiling for the past 3 sessions, new highs are new highs. And of course, these are all-time highs. But could it seem any less exciting? Things feel very bland and boring considering the records being broken.
There’s something of a default supportive bid for MBS at the moment relative to Treasuries, with the former up a few ticks on the day vs the latter down almost half a point , bringing yields up 5bps in 10yr notes. Granted, that benchmark environment isn’t the most confidence-inspiring, but with Fannie 3.5’s getting close to the 104-00 mark, a few lenders might reprice for the better just the same. Keep in mind that the range is quite narrow, so don’t expect much, and weigh those expectations against where this morning’s rate sheet landed versus yesterday afternoon’s.
Bottom line, until further notice, if we were planning on locking today, we’d be holding off until cut-off or until Fannie 3.5’s broke below, say 103-26.