Arty I have never seen lenders move long term mortgage rates by 40 basis points in a single day in the down direction. In general the only reason they move down is due to competition. Yet they move them up at the touch of feather. I am not talking about treasury yields, please reread, or rather I will restate it here. I have never seen lenders move rates down 30-40 basis points on a single movement. I have seen them move them down incrementally over time.
Your post said you expected rates to move down 30-40 basis points. To me a rate is the rate quoted given no buydown, it is not the treasury yield, or fed funds rate or libor or anything like that, nor is it the buydown amount. Again, and I am not a mortgage broker, I am talking about a simple long term mortgage rate you will get quoted. Now there very well may be a chunk down simply as the credit market greases up a bit to make up for the overreaction we have seen. However I will be very surprised to see that. I would envision small slivers down as each lender tries to undercut each other as long as the secondary market will purchase these instruments.
