Mortgage Rates Could Improve

MBS began today's session with solid gains, and the GDP report had little impact.

Third quarter GDP increased at a 2.0% annual rate, slightly above the consensus of 1.9%, and up from 1.3% in the second quarter. Many economists feel that a 2.0% growth rate is generally consistent with a steady labor market, but that a faster pace is necessary to see significant improvement. Consumer Sentiment rose to the highest level since September 2007.

This chart shows mortgage-backed securities (MBS) prices from Monday's market open until the time of this post. The vertical-axis reflects MBS prices as measured in basis points.

Falling MBS prices result in higher mortgage rates. Rising MBS prices result in lower mortgage rates. MBS pricing provided by MBSQuoteline.