Tuesday - November 26, 2013 - 11:10am ET

Current Trend Direction: Sideways to slightly higher

Float/Lock Bias: Floating- but cautiously with resistance just above current levelsCurrent Price of FNMA 4.0% Bond: $104.56, +6bp

Mortgage Bonds are near unchanged, after shrugging off positive housing data.

The Commerce Department reported that September Building Permits came in at 974K versus the 932K expected, while the October number rose to a 5 1/2 year high to 1.034M, well above the 932K expected. The surge was focused in multi-family dwellings. Housing Starts for both months will be released on December 18 due to the government shutdown.

Adding to the good vibe, RealtyTrac reported that residential property sales, including single-family homes, condominiums and townhomes rose 0.2% in October from September and up 13% from October 2012. Case Shiller reported that its 20-city Index year-over-year rose by 13.3% in September and just above the 13.0% expected, up from 12.8% in August to the largest yearly gain in 7 1/2 years. Overall this was all good news from the housing sector, but we expect this torrid price appreciation to moderate in 2014.

This afternoon at 1:00pm ET, the Treasury will announce the results from the $35B 5-year Note Offering and comes after yesterday's solid 2-year offering.

Technically, the 4% coupon is trading just below resistance at the "rising" 50-day Moving Average. We will continue to carefully float with a finger on the lock trigger.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com