Mortgage rates were unchanged today. The most prevalently quoted conforming 30yr fixed rate for best-case scenarios remains at 4.25%, with any improvements coming in the form of higher closing costs.

May pending home sales from NAR this morning was better than expected and the largest monthly gain since April 2010, when home sales spiked 9.6% ahead of the expiration of a tax credit for first-time home buyers. Last week May new home sales increased 18.5% from the previous month the biggest increase since May 2008. A blip due to pent up demand from the winter, or is the housing sector heating up? Too soon to tell, since last August the housing sector continued to soften and has a long way to go to end the slide, but the May data was good and we will take it.

Technicals remain good with the 10yr trading below its 20, 40 and 100 day averages, the 14 day relative strength index under 50 at 40 is bullish. A very short term view - the wider perspective is less certain, either technically or fundamentally. Q1 was shockingly weak but weather took a toll. Q2 is going to be better, how much better where investors are looking now, some forecasts is are very strong, up over 4.0% GDP growth. Interest rates are facing a steep wall to climb with current rates so low now, to drive rates lower from current levels the forth-coming economic data has to fail to meet estimates.