Mortgage Rates Stabilize After Opening At Highest Levels Since September

Mortgage rates continued higher today, reaching their worst levels since before the Fed announced the specific buying program of Mortgage-Backed-Securities referred to as QE3.

MBS are the tradable securities that have the most direct effect on lender's mortgage rates.

These considerations won't have any bearing on the actual purchases of MBS any time soon, but the adjustment in the longer term outlook caused a present day adjustment in MBS Prices.

When prices of MBS fall, rates rise, and the same is true for Treasury rates.

US Treasuries are also currently a part of the Fed's easing efforts and they trade with more liquidity overnight than the MBS that affect mortgage rates in the US. With that in mind, Treasuries continued to weaken in the overnight session, coming into the US hours in significantly weaker territory.

As trading got underway for MBS, prices opened up at levels not seen since before the QE3 announcement in mid September.

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