Good news for mortgage bonds means good news for homebuyers

[Update 1: Clarifies Sterne Agee analyst]

A surge in Fannie Mae, Freddie Mac and Ginne Mae agency mortgage bonds the last week of January may be what’s driving down the cost of mortgages this week.

As Sterne Agee analyst Henry Coffey notes agency bond values are being boosted by falling long term Treasury rates, driving down the cost of mortgages. According to Interactive Data, Treasurys trading edged down in price at the open following positive economic data from the Eurozone. That trend reversed on negative sentiment on the nation's economic recovery endured.

Nonetheless, favorable market conditions persist, which should bode well for the bonds in the near term.

“The expected gains in agency bond values and related boost in book values should show up in the March period, if treasury rates remain low and bond values hold at current levels,” Coffey wrote.

Full story @ HousingWire

References

Good news for mortgage bonds means good news for homebuyers | 2014-02-03 | HousingWire. (n.d.). Retrieved from http://www.housingwire.com/articles/28828-good-news-for-mortgage-bonds-means-good-news-for-homebuyers