Daily Market Update 12/31/08

Mortgage rates moved lower Wednesday after having jumped briefly Tuesday. Mortgage-backed securities (MBS) markets are likely to remain highly volatile through the week due to extremely light trading. The MBS market closes today at 2:00 PM et. Late yesterday the Fed announced it will begin purchasing up to $500 billion MBS's from Fannie Mae and Freddie Mac in January, prompting a market rally. In economic news, Jobless Claims fell to 492,000 last week, far below expectations. Stocks and the dollar moved modestly higher.

Daily Market Update 12/29/08

Mortgage rates moved slightly lower Monday in extremely light trading. Stocks were mixed, the dollar lower, and oil prices higher. The only major economic data scheduled for release this week will be the Chicago Purchasing Managers Index on Tuesday and the Institute for Supply Management Index on Friday. Both reports measure manufacturing activity and are expected to show a continued slowdown from previous months. Normal trading volume will resume in mortgage-backed securities markets next week. We anticipate somewhat lower rates in January as lenders return to full staff levels and regain control over current application pipelines.

Daily Market Update 12/26/08

Mortgage rates inched lower Friday in extremely light trading. No economic data is scheduled for release today. Stock prices moved modestly higher. Mortgage-backed securities markets will close today at 2:00 PM et.

Daily Market Update 12/24/08

Rates were little changed Wednesday on light trading in a shortened session. Mortgage-backed securities markets close today at 1:00 PM et. Durable Goods Orders fell 1.0% in November, much less than expected. First-time Jobless Claims surged to 586,000 last week. Consumer Spending fell 0.6%, less than forecast. Mortgage rates are unlikely to show much movement prior to year-end, with little economic data being released and many traders having closed their books for 2008. Capacity concerns among lenders due to heavy refinancing activity and staff shortages resulting from the Holidays will keep rates artificially high until January. Rates should improve as lenders gain control of current pipelines.

Daily Market Update 12/23/08

Mortgage rates moved higher Tuesday following a brief sell-off of mortgage-backed securities late Monday in light trading. Final revisions to third quarter GDP showed the economy declined 0.5% for the period, as expected. New and Existing Homes Sales fell in November more than forecast. Stocks were modestly lower, while oil prices fell below $40 per barrel. Those looking to refinance at or below 5% with minimum closing costs may need to wait until after the first of the year. Lenders have priced artificially high due to under-capacity of the industry, a problem that has been exacerbated by staff shortages through the holidays.

Daily Market Update 12/22/08

Mortgage rates were little changed Monday, with no economic data scheduled for release today. Trading volume is typically very light in the final two weeks of December, as most investors have closed their books for the year. Final third quarter GDP figures will be released tomorrow, along with New and Existing Home Sales. Durable Goods Orders for November will be reported Wednesday. Refinance volume has slowed in recent days due to an increase in mortgage rates from 45-year lows reached last week.

Daily Market Update 12/19/08

Mortgage rates inched higher Friday as stock prices climbed on news of an agreed $13.4 billion government bailout of GM and Chrysler. Oil prices continued falling to about $35 per barrel, an astounding 78% decline from their July peak. The dollar was sharply lower against the euro. While mortgage rates remain near 45-year lows, they have crept higher over the past two days, largely on the surge of refinancing demand. Lenders' limited capacity to process the increased volume of business is affecting pricing. Borrowers who have not yet locked their interest rates may benefit by waiting a few more days for the industry to catch up on their pipelines.

Daily Market Update 12/18/08

Mortgage rates rose Thursday morning as lenders responded to capacity concerns amid soaring refinancing demand. The spread between average fixed rate loans and Fannie Mae-guaranteed securities widened to 1.4% yesterday, ten times the five-year average of 0.14%. Borrowers may wish to consider floating rather than locking in, as rates are likely to improve as lenders gain control of their pipelines. In economic news, Leading Indicators fell 0.4% in November, near forecast. Weekly Jobless Claims came in at 554,000, just under consensus. Stocks were mixed, while oil prices fell below $40 pb.

Daily Market Update 12/17/08

Mortgage rates plummeted Wednesday morning on the heals of yesterday's FOMC meeting. In addition to dropping the Fed Funds Rate to a target range of 0% to 0.25% (the lowest level ever), the Fed said they will employ "all available tools" to stimulate economic growth, including the purchase of large quantities of mortgage-backed securities (MBS). MBS markets rallied on the news, pushing 30-year fixed rates to their lowest levels in over 40 years. Rates have been extremely volatile and have since risen by about 1/4% due to extraordinary refinancing demand. Such movement is fairly common after a significant improvement and rates may settle back down in the coming days.

Daily Market Update 12/16/08

Mortgage rates remained little changed Tuesday morning ahead of the Federal Open Market Committee (FOMC) policy announcement regarding interest rates. The Fed is widely expected to cut the Fed Funds Rate in half to 0.50% from 1.00%, marking the lowest level since 1954. The decision will be announced at 2:15 PM et. In economic news, the Consumer Price Index fell 1.7% in November, while the more closely watched "core rate", excluding volatile food and energy prices, was unchanged. Housing Starts fell 18.9% in November from October, 47% below November 2007 levels. Stocks moved higher.

Daily Market Update 12/15/08

Mortgage rates were little changed Monday. Industrial Production slid 0.6% in November, less than consensus. Oil prices rose on expectations of an impending supply cut by OPEC. The dollar moved lower against the euro in anticipation of a rate cut by the Fed at tomorrow's FOMC meeting. Traders are awaiting Tuesday's Consumer Price Index for November, followed by the Fed announcement at 2:15 PM.

Daily Market Update 12/12/08

Mortgage rates inched higher Friday but remained below levels seen since 2003. The Producer Price Index fell 2.2% in November while the more closely watched "core" rate, excluding volatile food and energy components, rose 0.1%, as expected. Retail Sales fell 1.8% in November, slightly less than consensus. The Treasury announced plans to prevent US auto manufacturers from failure until Congress reconvenes by tapping into the $700 billion TARP funds. Consumer Confidence rose unexpectedly in December on declining energy costs. Stocks and oil prices moved lower.

Daily Market Update 12/11/08

Mortgage rates continued their downward slide Thursday, reaching their lowest mark since 2003, and nearing 45-year lows. Yesterday the House passed a domestic automobile manufacturer rescue plan, although its fate remains uncertain in the Senate. Weekly Jobless Claims rose to 573,000, far above consensus. The Trade Deficit widened unexpectedly in November on declining exports. Crude oil prices were higher, the dollar lower, and stocks were little changed.

Daily Market Update 12/10/08

Mortgage rates inched lower Wednesday. No economic data is scheduled for release today. Traders are turning their focus to a flurry of reports due out in coming days, including Friday's release of Retail Sales and Producer Price Index data for November, Monday's Industrial Production, and Tuesday's Consumer Price Index and Federal Open Market Committee meeting. The mortgage-backed securities market will likely remain volatile throughout the period. Stocks moved modestly higher.

Daily Market Update 12/9/08

Rates held steady Tuesday as the National Association of Realtors reported Pending Home Sales declined less than expected in October. Some analysts see this as an early sign of stabilization in the housing market. Mortgage rates have fallen nearly 1% since the period covered in the report, fueling further optimism. Stocks moved modestly lower after two consecutive days of sharp increases. No other economic data is scheduled for release today.

Daily Market Update 12/8/08

Mortgage rates moved slightly higher Monday, reflecting Friday afternoon's market activity. Stocks rallied on news of an impending automaker rescue plan and President-elect Obama's announcement of a large infrastructure fiscal stimulus package. Traders will be closely watching this Friday's release of Retail Sales and Producer Price Index data for November.

Daily Market Update

Mortgage rates were little changed Friday, showing a muted reaction to the November Employment Report. The economy lost 533,000 jobs last month, the largest monthly loss since 1974 as the Unemployment Rate rose to 6.7%. On Wednesday the Treasury confirmed that it is considering a plan which would offer mortgage rates as low as 4.50% for select loans used for home purchases. At this point, it is not certain the proposal will be implemented. The mortgage-backed securities market remains unusually volatile.

Daily Market Update 12/4/08

Mortgage rates eased Thursday morning as the European Central Bank (ECB) cut rates by a record 75 basis points, more than the 50 basis points most investors expected. In economic news, Weekly Jobless Claims came in at 509,000, below the consensus of 540,000. Factory Orders dropped 5.1% last month, greater than expected. Stocks were modestly lower. Traders will be closely watching tomorrow's release of the Nonfarm Payrolls report for November for clues as to the severity of the economic downturn. Rates are likely to remain highly volatile in the meantime.

Daily Market Update 12/3/08

Interest rates rose Wednesday morning as Treasurys and mortgage-backed securities gave up some of their strong recent gains. The market changed directions at midday, and favorable repricing may occur this afternoon. In economic news, third quarter Productivity came in above forecast and Unit Labor Costs were revised lower. The Mortgage Bankers Association weekly purchase activity index rose by 38%, while the refinancing activity index increased by a whopping 203%, as average rates for the week fell by 1/2%.

Daily Market Update 12/2/08

Mortgage rates inched higher Tuesday in early trading, but remained close to their lows for the year. Stocks prices recovered somewhat from Monday's sharp sell off. 10-year Treasury yields dropped to 2.69%, the lowest level since 1955. Yesterday Treasury Secretary Paulson said that even though the government has "essentially guaranteed" Fannie Mae and Freddie Mac securities, mortgage rates have not come down "as much as we may have hoped". No economic data will be released today.

Daily Market Update 12/1/08

Mortgage rates fell again Monday as stocks moved lower. In economic news, the ISM Manufacturing Index reported the sharpest decline in new orders for manufactured goods in 26 years. Construction Spending fell 1.2% last month, greater than expected. Traders will be closely watching this Friday's release of Non-farm Payrolls data for November.

Daily Market Update 11/28/08

Mortgage rates were little changed Friday in a shortened session. The mortgage-backed securities market will close at 2:00 PM et. Stocks were mixed. No major economic reports are due out today.

Daily Market Update 11/26/08

Mortgage rates improved slightly Wednesday after having risen Tuesday afternoon. Rates improved dramatically yesterday morning following the Fed's announcement of plans to purchase mortgage-backed securities directly from Fannie Mae and Freddie Mac. Durable Goods Orders plummeted 6.2% in October, far greater than expected. President-elect Obama tapped former Fed Chief Paul Volcker to head a special economic advisory board. Volcker is highly regarded in the financial markets and by both major political parties. Bond markets will close at 2:00 PM today for the Thanksgiving Holiday.

Daily Market Update 11/25/08

Mortgage rates fell sharply Tuesday as the Fed and Treasury announced a new program to purchase up to $500 billion in mortgage-backed securities from Fannie Mae and Freddie Mac. This was the original proposal for the $700 billion TARP rescue, but the uses of the funds shifted before any mortgages were purchased. The goal of the new program is to lower mortgage interest rates. In other economic news, today's downward Gross Domestic Product revision matched consensus and had little impact. Stocks moved higher.

Daily Market Update 11/24/08

Mortgage rates were little changed Monday while Treasury rates moved higher. Stock markets have reacted favorably to the selection of several key positions within President-elect Obama's economic team, among them Timothy Geithner as Treasury Secretary, Lawrence Summers to head the National Economic Council, and Bill Richardson as Commerce Secretary. The government announced plans yesterday to guarantee $306 billion of troubled assets held by Citigroup, one of the world's largest financial institutions. The National Association of Realtors reported sales of existing homes fell 3.1% last month, more than expected. The median price fell 11.3% from the same period last year reflecting a large number of foreclosures and distressed sales. Key economic reports due out this week include tomorrow's release of revised third quarter GDP figures and Wednesday's Durable Goods Orders.

Daily Market Update 11/21/08

Mortgage rates inched higher Friday as stocks attempted to recover from steep losses earlier in the week. Treasury markets continued to out-perform mortgages, with yesterday's yield on the 10-year Treasury hitting 2.99%, the lowest level since 1962. The unusually wide spread between Treasury and mortgage rates is resulting from uncertainty among traders over the government's plan for Fannie Mae and Freddie Mac. Fannie and Freddie both announced yesterday they would suspend certain foreclosures until 1/9/09 in an effort to restructure borrowers' payments. Rates are likely to remain volatile next week, with several key economic reports due out before the Thanksgiving Holiday.

Daily Market Update 11/20/08

Mortgage rates eased Thursday as Initial Jobless Claims reached a 16-year high. Stocks continued their descent after closing below 8,000 yesterday for the first time since 2003. Oil prices fell to $50 per barrel, a whopping 66% decline since July. Congress failed to reach an agreement on a proposed $25 billion bailout for the Big Three domestic automobile manufacturers as debate continues over the appropriate source of funding for the plan.

Daily Market Update 11/19/08

Mortgage rates remained little changed following this morning's Consumer Price Index (CPI) report for October. Consumer Prices declined 1.0% last month due to falling energy prices. The more closely watched core rate, which excludes food and energy components, fell 0.1%, exceeding consensus. Minutes from the October Federal Open Market Committee meeting will be released today at 2:00 PM et.

Daily Market Update 11/18/08

Mortgage rates held steady Tuesday following the release of October's Producer Price Index (PPI). Producer Prices fell 2.8% in October from September, largely due to falling energy prices. The more closely watched core rate, which excludes food and energy, rose 0.4%, far more than expected. The economic slowdown is expected to lead to lower future readings in the core PPI. Treasury data released this morning showed that China and other foreign countries remained big buyers of US bonds in September. If the trend continues, it would be good news for mortgage-backed securities markets, perhaps leading to lower rates. Stocks were generally higher.

Daily Market Update

Mortgage rates were little changed Monday, as Treasurys continued to out-perform mortgage-backed securities. Industrial Production rose 1.3% for October, reflecting a resumption of production by oil refineries following Hurricanes Gustav and Ike. Fannie Mae announced plans to raise $2 billion this afternoon to refinance long-term debt. This is the first such sale since the government announced plans to rescue the mortgage giant and traders will be watching the auction results closely. Stocks moved lower.

Daily Market Update 11/14/08

Mortgage rates were little changed Friday morning while Treasury rates declined. Retail Sales fell by 2.8% in October, more than expected. Stocks moved sharply lower on the report. Freddie Mac posted a $25 billion loss in the third quarter and began tapping taxpayer funds. The Treasury provided $13.8 billion in exchange for preferred shares of the mortgage giant. Fannie Mae posted a $28 billion third quarter loss four days earlier. The Treasury has committed up to $100 billion rescue funds for each of the two entities.

Daily Market Update 11/13/08

Rates were little changed Thursday ahead of a flurry of economic data scheduled for release in the coming week. Key reports due out over the next four business days include Retail Sales, Industrial Production, the Producer Price Index, the Consumer Price Index, and the minutes from last month's FOMC meeting of the Federal Reserve. Mortgage-backed securities markets are likely to remain volatile throughout the period. Initial Jobless Claims for the week came in at 517,000, the highest level since 2001. Stocks were mixed. In other news, Treasury Secretary Paulson announced yesterday he will not use the $700 billion TARP funds to purchase toxic mortgages, as originally planned. Instead he intends to continue purchasing bank stocks and extend fund access to a wide range of financial service providers, including issuers of auto loans, credit cards, and student loans. Meanwhile, President-elect Obama endorsed a $50 billion rescue package for domestic automobile manufacturers.

Daily Market Update 11/12/08

Mortgage rates inched lower Wednesday as stocks fell sharply. Yesterday the Treasury and Federal Housing Finance Agency (FHFA) announced a plan to modify mortgage loans held by Fannie Mae and Freddie Mac in an effort to reduce foreclosures. Certain loans in excess of 90 days past due would qualify for lower interest rates and extended terms to trim payments to 38% of borrowers' gross monthly income. Sheila Bair, Chairman of the FDIC, objected on the basis the plan doesn't go far enough to stem the tide of foreclosures. She has called for a full government takeover of Fannie Mae and Freddie Mac and a reduction of the principal balance on many troubled mortgages. Other analysts fear the plan may encourage struggling homeowners to allow their payments to become 90 days delinquent in order to qualify for assistance. We agree on both counts, and consider the plan to be ill-conceived. In other economic news, oil prices slid below $58 pb and the Bank of England appeared poised for another rate cut. Retail Sales data for October will be released Friday.

Daily Market Update 11/11/08

Interest rates were unchanged, as mortgage-backed securities and Treasury markets are closed today in observance of Veteran's Day. Stock prices fell on lower earnings expectations. Crude oil prices continued their descent, reaching $60 pb, a 59% decline since peaking in July. The dollar moved slightly higher against most foreign currencies.

Daily Market Update 11/10/08

Mortgage rates remained little changed Monday as mortgage-backed securities markets will close at 2:00 PM and not reopen until Wednesday in observation of Veteran's Day. World stock markets rose following China's announcement of a $600 billion economic stimulus plan. Fannie Mae posted a $29 billion loss last quarter and may need to begin tapping into government rescue funds by year end. This will be a relatively light week in terms of economic data, with the exception of Friday's report on Retail Sales.

Daily Market Update 11/7/08

Mortgage rates were little changed Friday following a larger than expected jump in the Unemployment Rate to 6.5%. The Employment Report for October showed a net loss of 240,000 jobs in the US last month. While such gloomy data would normally tend to push rates lower, traders are concerned about the increased likelihood of another government stimulus package and the associated costs. The government will need to issue even more debt, adding to the $1 trillion deficit projected for next year. Surprisingly, stocks moved modestly higher. No other data is scheduled for release today.

Daily Market Update 11/6/08

Mortgage rates returned to yesterday's levels after having risen in early trading. Third quarter Productivity increased at a 1.1% annual rate, in line with expectations. The European Central Bank (ECB) and Bank of England (BOE) cut rates today, the ECB by .5% and the BOE by an unusually large 1.5%. The dollar rose against the euro and pound. Oil prices sank to 20 month lows as retail gas prices fell below $2 per gallon in some areas. Stocks moved sharply lower. Traders will be closely watching tomorrow's Employment Report for October, scheduled for release at 8:30 et. No other economic data will be released today.

Daily Market Update 11/5/08

Mortgage rates improved late Tuesday and early Wednesday as uncertainty over the election ended. Conventional 30-year fixed rates have now fallen 3/4% since last Thursday. Investors have turned their attention to weakness in the economy. The Institute for Supply Management's Services Index showed service industries contracted more than expected in October as a result of lower consumer spending. Traders are anxiously awaiting Friday's release of the Employment Report for October. Analysts are projecting a net loss of 200,000 jobs for the month. Stocks and oil prices moved modestly lower.

Daily Market Update 11/4/08

Mortgage rates inched lower in light trading as investors await the outcome of today's elections. Stocks moved sharply higher. The euro gained against the dollar on a decline in money market rates, as frozen credit markets continue to show signs of thawing. Oil and other commodity prices surged on the weaker dollar.

Daily Market Update 11/3/08

Rates were little changed Monday ahead of tomorrow's election. In economic news, the Institute for Supply Management's Manufacturing Index fell to its lowest reading in 26 years last month as factory orders declined sharply in the wake of the deepening credit crisis. Stocks were mixed. Friday's Unemployment Report will be closely watched by investors, but the main focus of the week will be the results of the Presidential election and various Senate races. Although the market is anticipating an Obama victory, a 60 vote majority by Democrats in the Senate is less clear and would shift power dramatically to the left. The financial markets typically prefer divided government. Regardless of the outcome, many traders will be glad to see an end to the uncertainty that has resulted from the lead up to the election.

Daily Market Update 10/31/08

Mortgage rates improved Friday following an abundance of negative economic data. Consumer Spending fell 0.3% in September, the largest monthly decline in 4 years. Consumer Sentiment registered the largest drop in 30 years, and the Chicago Purchasing Managers Index fell to 37.8 in September from 56.7 in August, the largest monthly decline in the 40-year history of the index. Surprisingly, stocks were little changed and the dollar moved higher against the euro. A growing chorus of analysts are calling on the Federal Government to officially take over Fannie Mae and Freddie Mac. An explicit guarantee of their securities would likely push mortgage rates significantly lower, more in line with Treasuries. Stubbornly high mortgage rates have contributed to the current housing crisis by preventing bargain-hunting homebuyers from entering the market. Fixed rates of 5% or less would provide a much-needed stimulus for the housing industry. No decision is expected until after next week's election.

Daily Market Update 10/30/08

Mortgage rates moved slightly higher Thursday following this morning's release of preliminary third quarter GDP figures. According to the data, the economy contracted 0.3% in the three months ending September 30. Although this was the first negative reading since 2002, traders had anticipated an even larger contraction. Stocks initially moved higher on the announcement. Later, gains were pared as analysts focused on a troubling component of the report, a 3.1% annual drop in consumer spending, the first decline since 1991. A significant reduction in spending could result in a far deeper and more sustained economic downturn. On a more positive note, the recent freeze in credit markets showed signs of easing, as the market for commercial paper expanded for the first time in seven weeks.

Daily Market Update 10/29/08

Mortgage rates were little changed Wednesday ahead of today's Federal Open Market Committee decision regarding short term interest rates. The Fed is widely expected to cut the Fed Funds rate from 1.50% to 1.00%. Their announcement will be made at 2:15 PM et. Mortgage rates have risen in the past week as many investment funds have been forced to sell mortgage-backed securities to reduce their leverage and raise capital. Under normal market conditions, the vast majority of significant rate movements are the result of economic news. The fundamental economic data clearly supports lower rates, but until the market stabilizes, unusual volatility and upward pressure on mortgage rates will continue.

Daily Market Update 10/28/08

Rates inched higher Tuesday as mortgage-backed securities markets remained extremely volatile. Mortgage rates have increased by about 3/4% since last Wednesday, driven by the continued liquidation of investments by hedge funds and financial institutions. In economic news, Consumer Confidence fell to its lowest reading on record in October, far below consensus. Rate volatility is likely to continue throughout the week with key economic data being released each day starting Wednesday plus tomorrow's meeting of the Federal Open Market Committee of the Federal Reserve.

Daily Market Update 10/27/08

Rates were little changed Monday as traders looked ahead to a flurry of economic news later this week. The Federal Open Market Committee (FOMC) of the Federal Reserve meets Wednesday to determine short term interest rate policy. Many analysts are expecting a 1/2% cut in the Fed Funds rate. Durable Goods Orders will also be released Wednesday. Advanced third quarter GDP will be released Thursday and is expected to show a 0.1% decline in economic growth for the period. Rounding out the week will be Friday's release of the Chicago Purchasing Managers Index. In other economic news, New Home Sales rose 2.7% last month, propelled by lower home prices. Stocks were modestly lower.

Daily Market Update 10/24/08

Mortgage-backed securities moved in opposite directions with Treasuries again Friday as nervous investors sought to minimize risk. Mortgage rates inched higher while Treasury rates dropped. Global stock markets plummeted on growing economic fears. Existing Home Sales rose unexpectedly last month by 5.5% as lower prices attracted more buyers. Oil prices fell to $64 per barrel in spite of an announced 5% production cutback by OPEC. The dollar moved higher.

Daily Market Update 10/23/08

Mortgage rates inched higher Thursday after falling steadily over the past week. Weekly Jobless Claims came in at 478K, slightly higher than expected. FDIC chief Sheila Bair announced guarantees to encourage loan modifications by servicers in an effort to prevent "avoidable" foreclosures. Stocks moved higher. The Federal Reserve Open Market Committee (FOMC) meets next Wednesday and is expected to lower the Fed Funds Rate by 1/4%.

Daily Market Update 10/22/08

Treasury markets were higher, stocks lower, and mortgage-backed securities flat as investors consider them riskier than Treasuries and safer than stocks. Global stock markets fell today on growing concerns of worsening economic conditions here and abroad. Oil prices fell to about $68 per barrel on weaker demand. The dollar moved higher against most foreign currencies. No economic data is scheduled for release today.

Daily Market Update 10/21/08

Mortgage rates improved Tuesday as global financial markets showed signs of renewed confidence. The so-called TED spread, the difference between what banks and the US Treasury pay to borrow for three months, fell to 261 basis points today after peaking at 464 basis points October 10, indicating a significant thawing of credit markets. Stocks inched lower, the dollar higher. Oil prices fell to about $72 per barrel, down from $147 in July. No economic data will be released today.

Daily Market Update 10/20/08

Mortgage rates improved slightly Monday as the yield spread between mortgage-backed securities and Treasuries declined. The Index of Leading Indicators rose last month, but the reading appears to be an anomaly caused by the steepening yield curve and increased money supply, both resulting from the credit crisis. Fed Chairman Bernanke, in testimony before the House Budget Committee, endorsed consideration of an additional economic stimulus package. Stocks moved higher. No additional economic data will be released today.

Daily Market Update 10/17/08

Rates inched lower Friday following a spate of gloomy economic reports. September Housing Starts fell to 817K, far below consensus, reaching their lowest levels since 1991. Building Permits, a leading indicator, fell to 786K. Consumer Sentiment fell to its lowest reading in the 30 year history of the index. Mortgage rates peaked on Wednesday after having risen by about 1% over the previous 10 days, and have since fallen about .5%. The drop provides an opportunity for anyone floating the rate on a pending loan to lock in. Stocks are now modestly higher after having fallen sharply at the open.

Daily Market Update 10/16/08

Mortgage rates improved Thursday as mortgage-backed securities rallied late yesterday on the 733 point decline in the Dow. The September Consumer Price Index (CPI) and "core" CPI both came in lower than expected, indicating tame inflation. Industrial Production fell 2.8%, well below consensus, showing the largest monthly decline since 1974. Stocks were modestly lower. Oil prices dipped to $73 per barrel, a 50% decline since peaking in July. The dollar continued its upward trend against the euro.

Daily Market Update 10/15/08

Mortgage rates rose Wednesday in spite of weaker than expected Retail Sales for September and falling stock prices. Retail Sales fell 1.2%, the largest monthly decline in three years. The September Producer Price Index (PPI) fell 0.4% from August but was up 8.7% from one year ago. The more closely watched "core" PPI, which excludes food and energy components, rose 0.4%, higher than projected. Recently, mortgage-backed securities markets have broken the usual pattern of moving in the opposite direction of the stock market. Fed Chief Ben Bernanke is scheduled to speak at 12:15 et.

Daily Market Update 10/14/08

Mortgage rates were little changed Tuesday, although Treasury rates jumped on news of the latest government plan to purchase non-voting shares of several key US banks. Stocks were mixed. No economic data will be released today. Markets remain volatile as traders continue to assess the likely impact of the various government rescue measures.

Daily Market Update 10/13/08

Rates are unchanged from Friday as bond markets are closed today in observance of Columbus Day. Stocks rallied in markets around the world Monday causing investors to speculate that the worst of the carnage may be over. Several key economic reports for September are due out later this week, starting with Wednesday's release of Retail Sales and the Producer Price Index, followed by Thursday's Industrial Production and the Consumer Price Index. So much has happened in recent weeks, however, that normal trader responses to the data may be muted.

Daily Market Update 10/10/08

Mortgage rates surged Friday morning, partially reflecting market activity late Thursday. Conventional 30-year fixed rates have jumped about 3/4% in the past 48 hours. The two main culprits have been concerns that the supply of debt will increase significantly to pay for all the government rescue actions and deleveraging. Due to margin calls and investor redemptions, many investment funds have been forced to sell assets to reduce their leverage. The global sell-off in stocks continued today. The Dow opened down about 700 points but has since recovered to about minus 250. Oil prices plunged to $81 per barrel, a 45% drop since July. Several key economic reports are due out next week, although the market turmoil has recently been trumping all other data.

Daily Market Update 10/9/08

Mortgage rates moved higher Thursday as global stock markets recovered some of their recent losses. The flight to quality trade has been reversing, meaning that investors are leaving the relatively safe haven of bond markets. In addition, the added supply of debt needed to fund the rescue plan is weighing on bonds and mortgage-backed securities. Jobless Claims came in close to expectations. No more economic data will be released today.

Daily Market Update 10/8/08

Rates moved higher Wednesday in what has been an extremely volatile day for financial markets. The Federal Reserve, in a coordinated move with other central banks around the world, cut the Fed Funds Rate from 2.00% to 1.50%. Investors' uncertainty about the economy may result in greater volatility than usual in the coming weeks.

Daily Market Update 10/7/08

Mortgage rates were little changed Tuesday ahead of Fed Chairman Ben Bernanke's speech at the National Association of Business Economics annual meeting. His comments are expected to focus on the current global financial crisis and will be closely watched by investors. The Fed announced a plan to purchase US Commercial Paper in an effort to ease liquidity for businesses. The minutes from the September 16 meeting of the Federal Open Market Committee (FOMC) will be released at 2:00 PM, although much has changed in recent weeks, so the information may be of little value. The dollar moved lower on expectations of an imminent rate cut by the Fed. Stocks were mixed.

Daily Market Update 10/6/08

Interest rates benefited Monday from another sharp sell off in stocks. The Dow Jones Industrial Average dropped below 10,000 for the first time in over four years. The euro fell sharply against the dollar on growing concerns over the financial stability of European banks. Oil plummeted to $90 pb, down 39% from its peak in July. Credit markets remain tight in spite of last week's passage of the $700 billion rescue package. No economic data will be released today.

Daily Market Update 10/3/08

Mortgage rates were little changed Friday as the House began debating the $700 billion rescue package. Stocks rose modestly on hopes an agreement would be reached later today. Non-Farm Payrolls fell by 159,000 in September, much larger than expected. The Unemployment Rate held steady at 6.1%. Traders' main focus remains on the fate of the government rescue plan. Markets are likely to remain extremely volatile while negotiations on the rescue package continue.

Daily Market Update 10/2/08

Rates inched lower Thursday as stocks fell sharply on weak economic data. Jobless Claims rose to 497,000, the highest level since September 2001, while Factory Orders declined 4.0% last month, worse than expected. Last night the Senate overwhelmingly approved the $700 billion rescue package, although its fate remains uncertain in the House. Tomorrow will likely be an extremely volatile day for the markets, as the closely-watched Employment Report will be released at 8:30 AM and the House takes up the Senate version of the government rescue plan. In other news, the European Central Bank (ECB) held rates steady, while the Federal Reserve is said to be considering further rate cuts to help stimulate the US economy.

Daily Market Update 10/1/08

Rates eased Wednesday morning after surging late Tuesday, as the pattern of market volatility continues. Stocks fell sharply on lower corporate earnings estimates and ISM Index data indicating the manufacturing sector of the economy contracted more than expected in September. Traders have increased their bets on the likelihood of a looming recession in recent days. The Senate is scheduled to vote later today on a revised government rescue package that includes tax relief and a temporary increase in FDIC coverage on bank deposits. The measure is expected to pass the Senate and move back to the House for reconsideration.

Daily Market Update 9/30/08

Rates inched higher Tuesday as stocks recovered partially from yesterday's losses. Speculation continued among traders that an economic rescue package will eventually pass Congress. Consumer Confidence and the Chicago Purchasing Manager's Index came in higher than forecast, but the news was overshadowed by events in Washington. The much-anticipated Employment Report for September will be released Friday.

Daily Market Update 9/29/08

Mortgage rates inched lower Monday as traders await further news on the proposed $700 billion rescue plan. Many lawmakers have expressed opposition to the plan but it is expected to pass within days. Also making headlines, Citigroup will purchase Wachovia, another firm which did not survive losses from mortgage investments. Today's economic data was mostly overlooked, as August Personal Income came in much lower than forecast. Domestic and foreign stock markets moved sharply lower. Oil prices fell to around $100 pb. The dollar traded higher against the euro.

Daily Market Update 9/25/08

Mortgage rates eased Thursday as Durable Goods Orders fell a larger than expected 4.5% in August. Jobless Claims rose to 493,000, far exceeding consensus. Rounding out the spate of negative economic news, New Home Sales fell 11.5% last month to their lowest levels in 17 years. However, investors' main focus has been the proposed $700 billion financial industry bailout. Last night President Bush went on live TV urging Congress to pass the plan to avoid a "long and painful recession". He is scheduled to meet today with presidential candidates McCain and Obama to discuss the proposal. Stocks moved higher as traders anticipate a swift passage of the plan.

Daily Market Update 9/24/08

Rates inched higher Wednesday as debate continued over the proposed $700 billion government rescue package. Fed Chairman Bernanke, testifying before the Joint Economic Committee, called for Congress to "act quickly to address the grave threats to financial stability". Opposition to the proposal has been growing among members of both parties and a quick resolution now appears less likely. In economic news, Existing Home Sales fell a larger than expected 2.2% in August. Year-to-date sales were down 10.7% from August 2007. Meanwhile, the median price fell 9.5% from a year earlier. Durable Goods Orders and New Home Sales figures will be released tomorrow.

Daily Market Update 9/23/08

Mortgage rates eased slightly Tuesday as traders await further news on the proposed $700 billion government bailout of the financial industry. Fed Chairman Bernanke and Treasury Secretary Paulson urged Congress to act swiftly to approve the plan. Stocks moved modestly higher. Oil prices stabilized at about $108 pb after soaring yesterday. No economic data will be released today.

Daily Market Update 9/22/08

Interest rates rose Monday as investors continue to work through the implications of the government's financial rescue plan. The unexpected increase in the supply of debt to fund the plan is hurting mortgage-backed securities and Treasury markets. Stocks and the dollar were sharply lower. No economic data will be released today.

Daily Market Update 9/19/08

Mortgage rates were little changed Friday as traders turned their focus to the broad relief program announced by the Treasury Department late yesterday. Specific details remain sketchy, but a government entity will be established to acquire underperforming mortgage assets from financial institutions. This will remove troubled assets and replace them with fresh capital for future lending opportunities. Major elements of the plan will require Congressional approval. Mortgage-backed securities have remained volatile in what has proven to be a truly historic week in financial markets. The economic calendar will be light next week with the exception of Durable Good Orders, to be released Thursday.

Daily Market Update 9/18/08

Mortgage rates inched higher Thursday amidst continued financial market turmoil. Weekly Jobless Claims rose to 455,000, while Leading Indicators fell 0.5% in August. Both reports came in worse than expected, but were eclipsed by news that the Federal Reserve and five other central banks agreed to pump $180 billion in reserves into the system to ease the growing liquidity crisis. Major banks have become reluctant to lend to each other for fear of unknown problems and the desire to hoard cash to protect themselves. The dollar fell against the euro and yen. Stocks were modestly lower. No other economic reports are due out this week.

Daily Market Update 9/17/08

Mortgage rates jumped late yesterday after the Fed announced it would hold the Fed Funds Rate steady, rather than reduce it by 1/4%, as many traders had expected. Market activity this morning has focused on an agreement by the Fed to loan AIG, the world's largest insurer, up to $85 billion for two years. AIG is expected to restructure and sell assets to repay the loan in what is being dubbed a "controlled bankruptcy". Housing Starts fell to their lowest levels since 1991 as the inventory of unsold homes remains high. Stocks moved sharply lower. Mortgage-backed securities' prices remain extremely volatile while investors attempt to analyze the recent spate of economic news.

Afternoon Update 9/16/08

Mortgage rates moved higher following the Fed's announcement that it would leave interest rates unchanged. Traders had been expecting a 25 basis point (1/4%) decrease in the Fed Funds Rate. The Federal Open Market Committee cited growing concerns over inflationary pressures in explaining their decision. While some analysts may be disappointed by the news, maintaining price stability is one of the key roles of the Fed. Holding short-term rates steady should help bolster the dollar and contain inflation, which may be beneficial in keeping a lid on long-term interest rates.

Daily Market Update 9/16/08

Interest rates have been extremely volatile all morning as traders attempt to assess the impact of recent turmoil in financial markets. Mortgage-backed securities' prices have swung back and forth between positive and negative territory several times in early trading. The Consumer Price Index showed a drop in retail prices for August of 0.1%, although the more closely-watched "core" rate increased 0.2%, in line with expectations. All eyes will be on the Fed this afternoon. The Federal Open Market Committee is expected to announce their decision regarding short-term interest rate policy at about 2:15 PM. Most economists predict a 25 basis point (1/4%) cut in the Fed Funds Rate, although the move is far from certain.

Daily Market Update 9/15/08

Mortgage rates improved slightly Monday morning, regaining territory lost Friday afternoon. Stocks plummeted on news of the bankruptcy filing of investment bank Lehman Brothers. Merrill Lynch, another major investment bank, will be purchased by Bank of America. AIG, the world's largest insurer, announced a restructuring which will include the sale of assets to raise capital. Oil prices dropped to $96 per barrel. The Consumer Price Index for August will be released Tuesday. The Federal Open Market Committee (FOMC) meets tomorrow and is considering lowering the Fed Funds target rate by 1/4% due to recent turmoil in the financial markets.

Daily Market Update 9/12/08

Mortgage rates held steady Friday, showing little reaction to reports on Producer Prices and Retail Sales for August. The "core" Producer Price Index, which excludes food and energy components, rose 0.2%, in line with consensus. Retail Sales fell well short of expectations with a decline of 0.3%. Stocks moved lower. Oil prices rose in anticipation of supply disruptions resulting from Hurricane Ike. Traders now turn their focus to next Tuesday's release of the Consumer Price Index for August and the Federal Reserve FOMC Meeting.

Daily Market Update 9/11/08

Rates were little changed Thursday as first-time Jobless Claims came in close to expectations. The dollar moved to its highest level against the euro in over a year; oil prices approached $100 pb., down from $147 two months ago. Stocks were mixed. Tomorrow's data on Retail Sales and Producer Prices looms large and may be a market mover.

Daily Market Update 9/10/08

Rates moved slightly higher Wednesday during another volatile session in the wake of the government bailout of Fannie Mae and Freddie Mac. Demand for mortgage-backed securities eased as stocks attracted capital from investors. Oil prices slid to $102 pb, while the dollar rose, approaching $1.40 against the euro. No economic reports were due for release today.

Daily Market Update 9/9/08

Mortgage rates inched lower Tuesday as traders continued to assess the impact of the government bailout of Fannie Mae and Freddie Mac. Sales of mortgage-backed securities surged Monday following the announcement, causing 30-year fixed rates to fall to around 6%. Pending Home Sales declined 3.2% in July. Stocks were lower. Investors are now turning their focus to Friday's release of Retail Sales data and the Producer Price Index. No other economic reports are due out today.

Daily Market Update 9/8/08

Mortgage-backed securities opened much higher this morning on news of the government takeover of Fannie Mae and Freddie Mac, resulting in the largest one-day drop in mortgage rates this year. While a conservator will have control over the two mortgage giants, day-to-day operations are expected to continue uninterrupted and with few changes. Stocks rallied in the US and abroad on the news. The dollar moved to its highest levels against the euro since last year. Oil continued its slide, reaching $105 pb.

Daily Market Update 9/5/08

The Unemployment Rate jumped to a five year high of 6.1% in August, helping to push mortgage rates to their lowest levels in 3 months. Non-farm Payrolls decreased by a larger than expected 84,000 last month. Stocks moved sharply lower on the report, extending yesterday's losses. The dollar strengthened, and has now risen 11% versus the euro in recent months. Oil prices dipped to $106 pb, representing a 28% decline since peaking in early July. Next week contains relatively little economic news until Friday's release of the Producer Price Index and Retail Sales data for August.

Daily Market Update 9/4/08

Mortgage rates improved Thursday as stocks slumped on weak economic news. Weekly Jobless Claims rose 15,000 to 444K, while several retailers reported sluggish sales. On a positive note, the Institute of Supply Management reported unexpected growth in the services sector of the economy in July. The dollar strengthened against the euro. Traders remain focused on tomorrow's release of the Employment Report for August.

Daily Market Update 9/3/08

Rates held steady Wednesday with little economic news scheduled for release. Factory Orders grew 1.3% in August, above consensus. Oil prices fell again today, reaching $107 per barrel, 27% below their July peak. Stocks were lower, the dollar higher.

Daily Market Update 9/2/08

Mortgage rates inched higher as stocks surged on falling oil prices. Crude oil plummeted to around $109 pb following lighter than expected damage from Hurricane Gustav. The ISM factory index showed a slight decline in US manufacturing last month. The Employment Report for August, due out Friday, will be closely watched by traders and may be a significant market mover. The dollar traded higher against the euro.

Daily Market Update 8/29/08

Mortgage rates improved slightly Friday as Personal Income showed a much larger decline than expected, due to the end of the government stimulus checks. The Core PCE price index, the Fed's preferred inflation indicator, rose to a 2.4% annual rate. The central bank would like to see this reading drop below 2.0%. The Chicago Purchasing Manager's Index, which measures manufacturing activity, came in well above expectations. Stocks were lower as oil prices staged their biggest weekly gain in two months due to the shutdown of Gulf oil rigs in preparation for the approaching storm.

Daily Market Update 8/28/08

Mortgage rates had little reaction Thursday to an upward revision in second quarter Gross Domestic Product to 3.3% from 1.9%. Higher than forecast economic growth was attributed to strong export sales and the government stimulus package. Stocks climbed on the report. First time Jobless Claims dropped for the fourth consecutive week to 425K, in line with expectations. Troubled mortgage giant Fannie Mae announced a shakeup of top management, replacing their Chief Financial Officer, Chief Business Officer and Head of Risk Management. Oil prices continued their recent upward trend as tropical storm Gustav approached the Gulf of Mexico.

Daily Market Update 8/27/08

Mortgage rates were mostly unchanged Wednesday as Durable Goods Orders increased a surprising 1.3% in July, led by strong exports. Oil prices rose on concerns over the threat from tropical storm Gustav. Yesterday's release of the minutes from last month's FOMC meeting revealed growing concerns over inflation among board members and a strong likelihood that the next interest rate move by the central bank will be higher. Second quarter GDP figures are due out tomorrow.

Daily Market Update 8/26/08

Mortgage rates improved slightly Tuesday ahead of this afternoon's release of the minutes from the Fed's most recent FOMC meeting. Traders will be watching closely for clues on central bank policy in coming months. New Home Sales increased 2.4% in July leading some analyst to conclude we may be nearing the bottom of the real estate market. Stocks moved modestly higher as the dollar hit 6-month highs against the euro.

Daily Market Update 8/25/08

Rates showed slight improvement Monday as capital moved out of equities and into bonds and mortgage-backed securities. Stocks were sharply lower. Existing Home Sales rose 3.1% in July. The remainder of the week is packed with economic reports that may affect interest rates, beginning with Tuesday's release of the minutes from the last Federal Open Market Committee (FOMC) meeting, followed by Durable Goods Orders on Wednesday, preliminary second quarter GDP figures Thursday, and the Chicago Purchasing Manager's Index Friday.

Daily Market Update 8/22/08

Rates moved slightly higher Friday as stocks showed solid gains on lower oil prices and a stronger dollar. Federal Reserve Chairman Ben Bernanke spoke at the annual Fed conference in Jackson Hole, Wyoming this morning, saying a recovery in the dollar and declines in commodity prices should lead inflation to moderate in coming months. However, he warned that policy makers are prepared to act if price increases don't slow. No economic reports were released today.

Daily Market Update 8/21/08

Mortgage rates moved slightly higher Thursday, giving up gains made late Wednesday. Oil prices surged on increased tension between the US and Russia and a weaker dollar. Leading Indicators showed a 0.7% decline in July, more than double the consensus forecast, heightening concerns by analysts of an economic recession. Weekly Jobless Claims came in below expectations.

Daily Market Update 8/20/08

Interest rates remained little changed Wednesday morning with no major economic reports due to be released until next week. Shares of Fannie Mae and Freddie Mac tumbled for the second consecutive day on growing concerns over the likelihood of a federal bailout. The two beleaguered mortgage giants have $223 billion of bonds maturing by September 30. Their success in rolling over this debt may determine whether they can remain liquid. The companies have reported combined losses of nearly $15 billion over the past year.

Daily Market Update 8/19/08

Mortgage rates had little reaction to this morning's release of the July Producer Price Index showing a 1.2% rise from June, doubling expectations. The more closely watched core rate rose 0.7% from June, also exceeding consensus. Much like last week's release of the Consumer Price Index, traders shrugged off the report, since oil prices have fallen more than 20% in recent weeks. July Housing Starts came in at 965K, the lowest level since 1993. Stocks moved lower.

Daily Market Update 8/18/08

Rates were little changed Monday in light trading. Stocks were sharply lower, fueled by increased concerns over a possible government bailout of Fannie Mae and Freddie Mac. Traders remain focused on tomorrow's release of the Producer Price Index for July, a key measure of inflation.

Daily Market Update 8/15/08

Rates held steady Friday, having shown little movement for the week. July Industrial Production rose 0.2%, higher than expected. Oil prices continued their downward trend, reaching $111 pb, a 24% reduction from their July peak. The dollar strengthened against the euro and is now up 8% from its low last month. Stocks were mixed. The next major economic report due out is the Producer Price Index, scheduled for release Tuesday. Traders will be watching closely for signs of rising inflation.

Daily Market Update 8/14/08

Rates moved slightly higher following this morning's release of the Consumer Price Index for July, showing a 5.6% annual rate increase, the highest since 1991. Energy prices have dropped significantly over the past few weeks, however, and future readings will reflect this. Stocks rallied, as investors had feared even higher inflation figures. Weekly jobless claims came in above forecast, at 450K. The dollar was higher against the euro.

Daily Market Update 8/13/08

Rates showed little reaction to today's release of Retail Sales for July. The 0.1% decline was in line with expectations. Traders are nervous ahead of Thursday's Consumer Price Index report, a key indicator of inflation. Stocks moved lower as oil prices rose over inventory concerns.

Daily Market Update

Mortgage rates held steady Tuesday as stocks declined. Several key economic reports are due out later in the week beginning with tomorrow's report on Retail Sales. The dollar continued to strengthen against the euro, helping push oil prices down to about $112 pb, a 23% reduction from its peak last month.

Daily Market Update 8/11/08

Rates were little changed Monday with no major economic reports being released today. The second half of the week is likely to be a bit more volatile, beginning with Wednesday's release of Retail Sales for July, the Consumer Price Index on Thursday, followed by Friday's report on Industrial Production. Stocks were mixed, the dollar strengthened against the euro.

Daily Market Update 8/7/08

Mortgage rates were little changed Thursday, trailing US Treasury markets for a second day following steep second quarter losses reported by Freddie Mac. Weekly Jobless Claims came in at 455,000, well above consensus, but Pending Home Sales for June rose unexpectedly by 5.3%. The European Central Bank (ECB) left rates unchanged this morning. Stocks were lower, the dollar higher. Rates are likely to remain volatile ahead of tomorrow's earnings report by Fannie Mae

Daily Market Update 8/6/08

Mortgage rates moved higher Wednesday after Freddie Mac released disappointing second quarter earnings and warned of more trouble ahead. Freddie reported a net quarterly loss of $821 million, three times analysts estimates, and announced plans to raise additional capital. They also doubled reserves for future loan losses to $2.8 billion, citing rising delinquency and foreclosure figures. Mortgage-backed securities sold off sharply on the news, performing much worse than US Treasuries. Stocks moved lower. Fannie Mae plans to release their quarterly earnings report Friday.

Daily Market Update 8/5/08

Mortgage rates were unchanged to slightly higher Tuesday morning ahead of this afternoon's Fed policy decision regarding short term interest rates. Although expected to hold rates steady, their "bias" is likely to change from neutral toward higher (rates) to combat inflation. There has been some dissent among FOMC members at recent meetings. It is possible that 3 members of the 12-member panel will vote to increase rates. If so, this would be the largest number of dissenting votes since 1992. Many analysts feel the recent decline in oil prices may have taken some pressure off the immediate need for higher interest rates. Stocks and the dollar moved higher as oil prices dropped below $120 pb.

Daily Market Update 8/4/08

Mortgage rates inched higher Monday ahead of Tuesday's Federal Open Market Committee (FOMC) meeting of the Federal Reserve. Few economists expect any change in short term interest rates as a result of the FOMC meeting, but investors will be closely watching the accompanying Fed statement for clues as to the future direction of rates. Reports released today on Factory Orders and Personal Income both came in above consensus. Oil continued its recent decline, falling to $121 per barrel from a high of $146 last month. Stock prices were modestly lower.

Daily Market Update 8/1/08

Mortgage rates were unchanged following the Employment Report showing the US economy lost 51,000 jobs in July, a little less than expected. The Unemployment Rate rose to 5.7%, the highest level since March 2004. The Federal Reserve is now almost certain to hold short term interest rates at their present level at the FOMC meeting next Tuesday due to concerns over rising unemployment. Stocks moved lower, while the dollar was higher against the euro.

Daily Market Update 7/31/08

Interest rates moved lower Thursday on weaker than expected economic reports. Second quarter Gross Domestic Product (GDP) grew 1.9%, below forecast of 2.3%, and Weekly Jobless Claims spiked to 448,000, well above expectations of 395,000. Stocks and oil prices moved lower on the news. Much of the growth in GDP was attributed to the economic stimulus checks sent out last quarter. Congress is now debating additional stimulus measures, but the growing budget deficit may limit their options. Tomorrow's release of the Employment Report for July will be closely watched by traders and may be a significant market mover.

Daily Market Update 7/30/08

Rates were little changed Wednesday. President Bush signed the housing rescue bill into law this morning, easing some investors' concerns over the stability of the mortgage market. Stocks and the dollar were higher. No major economic reports are scheduled for release today.

Daily Market Update 7/29/08

Mortgage rates inched up Tuesday as an unexpected increase in Consumer Confidence and a drop in crude oil prices pushed stocks higher. Concerns grew over the newly released estimates for the 2009 Federal budget deficit, adding further pressure to interest rates. The market remains volatile, with wide daily swings in mortgage-backed securities prices. Several key economic reports are scheduled for release later this week, including the closely watched Employment Report due out Friday.

Daily Market Update 7/28/08

Mortgage rates improved Monday following the Senate's passage of the omnibus housing rescue package over the weekend. The bill has now moved on to President Bush for his signature. Investors' confidence in the stability of Fannie Mae and Freddie Mac had waned in recent weeks prior to the government's decision to stand behind the housing finance giants. Stocks and the dollar were lower.

Daily Market Update 7/25/08

Mortgage rates inched higher Friday as June Durable Goods Orders rose 0.8%, well above forecast. Adding further pressure to rates was a stronger than expected report on New Home Sales for June. The big news for the week was the likely passage of a comprehensive Housing Bill aimed at shoring up Fannie Mae and Freddie Mac, and providing up to $300 billion in new loans to troubled homeowners facing foreclosure. In addition, the bill provides funds for low income housing and a tax credit up to $7,500 for first-time home buyers. Next Friday's release of the Employment Report for July will be closely watched by investors and may be a significant market mover.

Daily Market Update 7/24/08

Rates improved Thursday following a spike in Weekly Jobless Claims and a larger than expected drop in Existing Home Sales. Home resales fell 2.6% in June. Nationally, median home prices dropped 6.1% compared with a year earlier. Yesterday the House passed a $300 billion housing rescue bill, as expected. The measure is likely to be approved by the Senate today or tomorrow before moving onto the White House, where President Bush has indicated his willingness to sign the bill. Stocks moved lower, oil prices held steady at about $124 a barrel, and the dollar was higher against the euro.

Daily Market Update 7/23/08

Rates were unchanged Wednesday with no major economic reports being released. President Bush dropped his threat to veto the sweeping housing bill being considered in Congress. The 700 page measure, offering up to $300 billion in assistance to troubled homeowners, will now likely be approved within days. The bill provides support to housing giants Fannie Mae and Freddie Mac, eliminates seller-funded down payment assistance programs, provides a limited tax credit to first time homebuyers, and increases minimim down payment requirements under FHA to 3.5% from 3%.

Daily Market Update 7/22/08

Mortgage rates remained near 11 month highs as Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank should increase rates "sooner rather than later" to head off inflation. Separately, Treasury Secretary Paulson suggested that Fannie Mae and Freddie Mac might need a support package from the government. The Congressional Budget Office estimated the likely cost of such a package would be $25 billion, but could exceed $100 billion depending on the length and severity of the housing downturn. The messages from both speakers hurt mortgage-backed securities markets. Oil prices resumed their recent downward trend, plummeting to $125 a barrel, a 14% drop over the past week. No major economic reports are due out today.

Daily Market Update 7/21/08

Rates were little changed Monday following a rough week ending July 18. Last week, global inflation fears hurt the bond and mortgage-backed securities markets. Additional pressure was applied to rates as stocks surged following a drop in oil prices from about $147 per barrel to about $129, causing funds to move out of fixed income securities and into stocks. During his testimony before Congress, Fed Chief Bernanke described the inflation outlook as "unusually uncertain". 30-year fixed rates are now at their highest levels since last August. The economic calendar will be lighter this week, with the most significant report due out Friday on Durable Goods Orders.

Daily Market Update 7/17/08

Rates moved higher in a volatile session on Thursday. Housing Starts rose unexpectedly, while first time unemployment claims dipped below forecast. Stocks were generally higher as concerns over the stability of major financial institutions eased. Treasury Secretary Henry Paulson tried to rally support in Congress for the Bush Administration's plan to rescue Fannie Mae and Freddie Mac. The proposal has met resistance in recent days, primarily among Republicans, citing concerns over the cost and questioning the need for such drastic measures.

Daily Market Update 7/16/08

Rates inched higher Wednesday as June's Consumer Price Index rose at a greater than expected 5.0% annual rate. Industrial Production for June also exceeded forecast, applying additional pressure on interest rates. Stocks and the dollar moved higher. Oil prices continued falling to about $135 a barrel from $146 on Monday. Minutes from the June 25 Fed meeting will be released at 2:00 PM et.

Daily Market Update 7/15/08

Rates held steady Tuesday as the impact of two key economic reports offset one another. The Producer Price Index came in at a higher than expected annual rate of 9.2% (although the "core" rate, excluding food and energy compenents, rose a more tame 3.0%), but Retail Sales fell short of expectations, rising just 0.1% from May. Federal Reserve Chairman Ben Bernanke testified before Congress, providing a more gloomy assessment of the economy than expected. The dollar hit new lows against the euro. Stocks moved lower on Bernanke's comments.

Daily Market Update 7/14/08

Mortgage rates improved Monday, regaining ground lost Friday afternoon, on reports the Fed and Treasury will take steps to support Fannie Mae and Freddie Mac. This will be a busy week for economic news beginning Tuesday with the Producer Price Index and Retail Sales reports, followed by Wednesday's release of the Consumer Price Index and Industrial Production for June, along with minutes from the last Fed meeting. Bank stocks tumbled following Friday's collapse of IndyMac and concerns over the stability of other large financial institutions, particularly Washington Mutual and National City Bank.

Daily Market Update 7/11/08

Mortgage rates improved Friday as speculation of a looming government bailout of Fannie Mae and Freddie Mac continued. The stocks of both companies fell further and are now down around 90% from one year ago. Fannie and Freddie, together, account for about 70% of mortgage originations in the U.S. Analysts agree the government would not allow their failure, as borrowing costs would rise significantly and the availability of mortgage loans would be severely restricted. Oil prices surged another $5 per barrel on top of the $5 jump yesterday, reaching a new high of $146. The Dow is off over 200 points.

Daily Market Update 7/10/08

Rates remained little changed Thursday as concerns grew over the financial stability of mortgage giants Fannie Mae and Freddie Mac. Stock prices for both companies hit their lowest point in over 15 years. The Wall Street Journal reported the Bush Administration has been considering a contingency plan should the companies become insolvent due to rising mortgage defaults. Most analysts believe the government would not allow Fannie or Freddie to fail given the impact such an event would have on the housing market. Separately, oil prices moved higher, the dollar lower, and stocks were mixed

Daily Market Update 7/9/08

Rates held steady Wednesday after improving late Tuesday. No major economic reports are scheduled for release today. Stocks are mixed, the dollar is lower.

Daily Market Update 7/8/08

Mortgage rates improved Tuesday, regaining territory lost Monday. Pending Home Sales fell 4.7% in June, greater than expected. Crude oil prices sank for a second consecutive day to about $136 a barrel, down from nearly $145 last Friday. Stocks and the dollar were modestly higher.

Daily Market Update 7/7/08

Mortgage rates rose modestly Monday as stocks climbed out of bear territory. Oil prices plunged over $4 a barrel and the dollar gained strength against the euro. With few economic reports due out this week, Fed speakers may provide the majority of news impacting interest rates.

Daily Market Update 7/3/08

Rates were little changed Thursday as the news contained few surprises. The economy lost 62,000 jobs in June, close to expectations. The Unemployment Rate remained at 5.5%. The European Central Bank (ECB) raised interest rates by 1/4% while indicating they believe this will be the only rate hike in the near term. Oil prices topped $145 a barrel, the dollar was higher. The financial markets close early today for the July 4th Holiday.

Daily Market Update 7/2/08

Rates were unchanged Wednesday morning after moving higher late Tuesday. No major economic reports are due out today. Tomorrow's session may be volatile, with the release of June's Employment Report, the announcement of interest rate policy by the Fed's European counterpart, the ECB, and an early market closing due to the Independence Day Holiday.

Daily Market Update 7/1/08

Mortgage rates were mostly unchanged Tuesday ahead of a potentially big day Thursday. In addition to the release of the Employment Report, a key measures of economic activity, the European Central Bank (ECB) is expected to boost rates by 1/4% Thursday. If they follow through as hinted by ECB President Jean-Claude Trichet, the Federal Reserve may be forced to raise rates sooner rather than later to avoid further erosion in the value of the dollar and continued escalation of oil and other commodity prices. The Fed has been doing a tough juggling act lately, attempting to balance the competing interests of a weak economy with rising inflationary pressures.

Daily Market Update 6/30/08

Rates were little changed Monday after improving late Friday. The Chicago Purchasing Managers Index came in slightly above forecast, although the reading of 49.6 indicates contraction in U.S. manufacturing. All eyes now turn to Thursday's release of the Employment Report for June. The market will be closed Friday for the July 4th Holiday.

Daily Market Update 6/27/08

Rates were mostly unchanged Friday, having improved by about .125% for the week. The Fed's preferred measure of inflation, the core PCE (Personal Consumption Expenditures) report increased 0.1% for May, less than forecast. Consumer Spending rose 0.8% for the month, driven mostly by the distribution of economic stimulus checks. Oil prices hit a new record, topping $142 a barrel before settling slightly. Stocks were modestly lower after Thursday's drubbing. Several key economic reports are due out next week, beginning with the two primary measures of manufacturing activity, the Chicago PMI and the ISM Index scheduled for release Monday and Tuesday, respectively. Thursday's release of the Employment Report for June will be closely watched by traders and may trigger movement in interest rates.

Daily Market Update 6/26/08

Mortgage rates dipped slightly following yesterday's decision by the central bank to hold rates steady. Oil prices jumped and the dollar tumbled on the news. The Fed recognized inflation "uncertainty" remains high, but said the "Committee expects inflation to moderate later this year and next year." In other economic news, Existing Home Sales rose 2% in May from April but remained 16% below last May. Average U.S. home prices fell 6.3% from a year earlier.

Daily Market Update 6/25/08

Mortgage rates moved slightly higher Wednesday as traders await news from the central bank's Federal Open Market Committee meeting. Durable Goods Orders for May were unchanged from April, matching expectations. New Home Sales declined. No rate change is likely to result from today's Fed policy meeting, however the accompanying statement will be closely watched by the market for clues on the future direction of interest rates, and a large reaction is possible. The Fed announcement will come out at 2:15 PM et.

Daily Market Update 6/24/08

Rates were mostly unchanged Tuesday ahead of tomorrow's monetary policy announcement by the Fed. Consumer Confidence came in below expectations but the market showed little reaction to the report. Wednesday will be a potentially volatile day for mortgage rates as Durable Goods Orders and New Home Sales figures will be released in the morning, followed by the FOMC announcement in the afternoon.

Daily Market Update 6/23/08

Rates showed little movement Monday ahead of this Wednesday's meeting of the Federal Reserve Open Market Committee. Traders are likely to remain on the sidelines with no major economic reports due out today. Stocks remained near unchanged levels, the dollar was higher against the euro.

Daily Market Update 6/20/08

Mortgage rates remained little changed Friday, having improved slightly for the week. Traders scaled back expectations of aggressive rate hikes by the Fed in coming months amid signs of a deepening economic slowdown. Oil prices surged on reports of an Israeli military exercise rehearsing potential bombing attacks on nuclear facilities in Iran. Stocks and the dollar were lower. Next Wednesday will be a day to watch interest rates with the scheduled release of Durable Goods Orders for May and the central bank's Federal Open Market Committee meeting to determine monetary policy. While few forecasters expect any change in the Fed Funds Rate, the statement released following the meeting will be closely analyzed for clues as to the future direction of rates.

Daily Market Update 6/19/08

Rates moved slightly higher Thursday after improving late Wednesday. Freddie Mac reported weekly average mortgage rates at their highest levels in 9 months. Leading Indicators for May rose 0.1%, above expectations. Investors remain focused on rising inflation due to the recent spike in oil prices. The Fed's Open Market Committee meets next Wednesday, although no change in interest rate policy is expected.

Daily Market Update 6/18/08

Mortgage rates eased for a second consecutive day on expectations the Fed will wait until at least September before raising the target Fed Funds Rate. Growing signs of economic weakness will likely prevent the central bank from taking action sooner. Stocks and oil prices fell, the dollar was higher.

Daily Market Update 6/17/08

Rates improved Tuesday following reports showing economic weakness in Europe and easing concerns over an eminent rate increase by the Fed. Producer Prices rose at an annual rate of 7.2%, but the more closely watched "core" rate increased 3.0%, in line with expectations. Industrial Production declined slightly. Stocks and the dollar were lower.

Daily Market Update 6/16/08

Mortgage rates moved higher Monday on a weaker dollar and record high oil prices. Rates have now climbed about 3/4% in the past four weeks as inflation concerns have dominated investor sentiment.

Daily Market Update 6/13/08

Rates were little changed following Friday's release of the Consumer Price Index for May. While prices climbed 0.6% for the month (4.2% for the past 12 months), the "core" rate, excluding volatile food and energy prices, increased 0.2% as forecast. Global inflation fears pushed mortgage rates to their highest levels of the year this week. Tough talk concerning inflation by several Fed officials, including Chairman Ben Bernanke, raised expectations of central bank rate increases in coming months. The dollar continued its trend higher against the euro and yen. Next Tuesday will be an active day for economic news with the scheduled release of the Producer Price Index, Housing Starts, and Industrial Production.

Daily Market Update 6/12/08

Rates pushed higher Thursday, reaching their highest levels in over 8 months, on stronger than forecast Retail Sales for May. The unexpected resiliency of the US economy is seen as increasing the likelihood of earlier, more aggressive rate hikes by the Fed to curb inflation. Some analysts attributed the reported 1% increase in sales to the economic stimulus checks currently being distributed by the Treasury. Stocks and the dollar moved higher on the news.

Daily Market Update 6/11/08

Rates held steady early Wednesday as mortgage-backed securities partially regained ground lost Tuesday afternoon. Concerns over rising global inflation sent stocks lower. Investors fear central banks around the world will be forced to raise interest rates to fight inflation even though economic growth remains slow. Focus now turns to tomorrow's report on Retail Sales for May and Friday's release of the Consumer Price Index.

Daily Market Update 6/10/08

Rates continued trending higher Tuesday following last night's speech by Fed Chairman Ben Bernanke indicating policy makers will "strongly resist" any surge in inflation expectations. Bernanke also stated he believes the risk of substantial economic downturn has diminished in the past month. Mortgage rates have now risen by about 5/8% over the past three weeks reflecting growing inflationary concerns by investors. Many forecasters expect the central bank to begin raising rates in coming months in spite of generally weak economic conditions. Oil prices remained near record levels, the dollar was higher.

Daily Market Update 6/09/08

Rates moved higher Monday as stocks rebounded somewhat from a huge selloff Friday. Pending Home Sales showed a surprising 6.3% increase in April to their highest level since October. Some analysts are citing the report as evidence the real estate market may finally be bottoming out. Key economic reports this week include Thursday's release of Retail Sales data and Friday's release of the Consumer Price Index (CPI) for May.

Daily Market Update 6/6/08

Mortgage rates moved modestly lower Friday following the Employment Report for May showing a net loss of 49,000 jobs, and a surprising 1/2% jump in the unemployment rate to 5.5%. Rates inched higher for the week on the heals of Fed Chairman Bernanke's comments reflecting concern over rising inflation. Further rate cuts by the Fed now appear unlikely. The dollar fell sharply against most foreign currencies over the past two days causing a spike in oil prices from $122 to $134 a barrel, adding further upward pressure on rates. Next week will be a quiet week for economic reports with the exception of Thursday's release of Retail Sales figures for May.

Daily Market Update 6/5/08

Rates moved higher for a second day following Fed Chairman Ben Bernanke's comments yesterday emphasizing significant inflation concerns. Bernanke clearly indicated the central bank's focus has turned to fighting inflation and shoring up the weak US Dollar. Separately, weekly jobless claims came in at 357,000, better than the consensus of 370,000. The economy continues to show signs of remarkable resilience in spite of the depressed housing market and credit crunch.

Daily Market Update 6/4/08

Rates remained steady Wednesday as first quarter Productivity was revised higher, to 2.6% from 2.2%. Growth in productivity helps keep inflation in check by allowing companies to offset higher costs through greater efficiency. Oil prices continued their slide to around $123 a barrel, down from a peak of $135 last month. US consumers have abruptly changed their car buying patterns in the wake of higher gas prices, shunning trucks and SUV's in favor of smaller, more fuel efficient automobiles. Attention now turns to Friday's release of the Employment Report for May.

Daily Market Update 6/3/08

Mortgage rates remained little changed Tuesday after showing some improvement late Monday. Federal Reserve Chairman Ben Bernanke implied the central bank is unlikely to reduce interest rates further due to mounting inflationary pressures resulting from a weak US Dollar and rising commodity prices. In his first speech on the economic outlook in two months, Bernanke said the Fed is working with the Treasury to "monitor developments in foreign exchange markets" and is aware of the effect of the Dollar's decline on inflation. Analysts believe his remarks provide further evidence the Fed has shifted its focus from economic stimulus to price stability.

Daily Market Update 6/2/08

Mortgage rates were little changed Monday on news that April Construction Spending fell less than expected and the ISM Index, a key measure of the manufacturing sector, came in at 49.6 for May, up from 48.6 the previous month. While a reading below 50 indicates contraction in manufacturing, the increase was not expected. In other economic news, oil prices dropped below $126 a barrel and the Dollar was higher against the Euro. The main event for the week will be Friday's Employment Report. Early estimates are for a net loss of 50,000 jobs in May.

Daily Market Update 5/30/08

Rates improved following this morning's release of the April Core PCE price index, the Fed's preferred inflation indicator, showing an annual increase of 2.1%. Although the Fed would like to see this level fall below 2%, the data was in line with expectations. Even with today's gains, the mortgage-backed securities market has seen a rough week, with rates having risen about 1/4% since Monday. Yesterday, Dallas Fed President Richard Fisher commented that if the inflation outlook continues to worsen he expects a change in monetary policy will occur "sooner rather than later". Futures on the Chicago Board of Trade now show a 31% chance the Central Bank will raise the target Fed Funds rate by at least 1/4% in September. Ultimately, a hawkish attitude on inflation by the Fed will benefit the market by holding down long-term fixed rates, since inflation erodes the value of fixed rate securities.

Daily Market Update 5/29/08

Mortgage rates continued their upward trend Thursday as first quarter Gross Domestic Product (GDP), a key measure of economic growth, was revised higher. Investor sentiment has shifted in recent days, as inflationary fears have increased while concerns about a severe economic contraction have receded. Most forecasters are now expecting the next Fed move to be an increase in rates later this year. Crude oil prices moved higher on a report showing an unexpected decline in oil and gas inventories. Focus now turns to tomorrow's Department of Commerce release of the Core PCE, which measures price changes in consumer goods and services and is watched closely by the Fed.

Daily Market Update 5/28/08

Mortgage rates moved higher Wednesday as Durable Goods Orders for April were better than expected. Oil prices slid below $128 a barrel; stock prices and the US Dollar were higher. Mortgage-backed securities investors remain focused on signs of increasing inflation in spite of general weakness in the economy. Lingering concerns about "stagflation", the term coined in the late 1970's describing slow economic growth coupled with high inflation, are currently preventing any sustained improvement in long term interest rates.

Daily Market Update 5/27/08

Mortgage rates inched higher Tuesday on global inflationary fears. In economic news, the Standard & Poors/Case-Shiller Home Prices Index showed a 14.1% decline in home prices for the first quarter of 2008 compared the same period a year earlier. New home sales increased unexpectedly by 3.3% in April from March but were down 42% from April 2007. Oil dipped below $130 a barrel and the US Dollar was higher. Investors now await Wednesday's report on Durable Goods Orders and Friday's release of the Core CPE, a key gauge used by the Federal Reserve to measure inflation.

Daily Market Update 5/23/08

Mortgage rates inched lower as the National Association of Realtors reported a 1% decline in Existing Home Sales for April from March. The annual pace of 4.89 million units represents a 17.5% drop from April 2007. The median price for the month fell 8% from a year ago. Stocks were lower as oil resumed its surge to nearly $133 a barrel. The main news for the week was Tuesday's release of minutes from the Fed's April FOMC Meeting indicating growing inflationary concerns among Fed members. Further rate cuts now appear unlikely, and most analysts expect the Fed to begin raising rates by year end. One positive development for the week was the return of investor confidence in financial markets, where the worst appears to be over.

Daily Market Update 5/22/08

Rates moved higher Thursday as crude oil prices topped $135 per barrel before falling back slightly. Bond traders now see a 30% chance the Fed will need to begin raising interest rates in September to help curb inflation according to the Chicago Board of Trade. US home prices fell 0.2% last quarter, less than forecast. Fed officials lowered their 2008 economic growth outlook yesterday, while raising their outlook for price growth. Separately, first time jobless claims fell to 365,000, down from 374,000 the prior week.

Daily Market Update 5/21/08

Mortgage rates were mixed Wednesday as fixed rates moved modestly higher and adjustable rates improved. Inflationary concerns, driven by higher oil prices and a weaker US Dollar, continue to dominate investor sentiment. Minutes from the April 30 Federal Open Market Committee meeting will be released this afternoon at 2:00 PM. This should provide a more detailed look at the reasoning behind the Fed's most recent rate cut. Economists will also be searching the report for hints as to the likely direction of future Fed moves.

Daily Market Update 5/20/08

Rates inched lower Tuesday morning as stocks tumbled. The Dow Jones Industrial Average is currently down nearly 200 points on the day. April's Producer Price Index rose a less than expected 0.2%, but this was largely offset by a greater than expected 0.4% increase in the "Core" PPI. The Core PPI excludes volatile food and energy prices. Meanwhile, crude oil prices topped $128 per barrel, setting another new record.

Daily Market Update 5/19/08

Rates were little changed Monday as leading indicators for April rose 0.1% as expected. The biggest economic report of the week will be tomorrow's Producer Price Index (PPI) data for April. The Existing Home Sales report is due out Friday, a day when the mortgage market will close at noon due to the Memorial Day Holiday. Expect rates to move slightly higher Friday as traders square positions ahead of the three-day weekend.

Daily Market Update 5/16/08

Mortgage rates eased following Friday's report on Consumer Confidence, indicating the lowest level since 1980. April Housing Starts rose unexpectedly by 8%. Building Permits, a leading indicator of housing market activity, rose 5%, the first increase in five months. Oil prices reached a new record high of $127 per barrel. Freddie Mac reported average mortgage rates fell to 6.01% for the week from 6.05% the previous week. Focus now turns to next Tuesday's release of the Producer Price Index for April as investors look for further signs of inflation.

Daily Market Update 5/15/08

Mortgage rates were little changed Thursday as Weekly Jobless Claims came in close to expectations and Industrial Production for April declined 0.7%. Crude oil prices continued climbing into record territory. Weakness in the economy would normally result in lower interest rates, but inflationary concerns are preventing any significant downward movement. Many economists are now predicting rate increases by the Fed before year end.

Daily Market Update 5/14/08

Rates were little changed Wednesday, regaining ground given up late Tuesday. The April "Core" CPI rose at a 2.3% annual rate, slightly lower than expectations, indicating higher food and energy prices have not been passed through to the prices of other goods thus far. The Fed generally aims to keep Core CPI readings below 2.5%. Average 30-year fixed rates fell to 5.82% (with points) from 5.91% the prior week.

Daily Market Update 5/13/08

Rates moved higher Tuesday as Retail Sales for April were generally stronger than expected, although auto sales fell short of forecasts. Investors remain concerned about the underlying rate of inflation caused by a variety of factors, particularly rising oil prices and the weak US Dollar. Tomorrow's release of the Consumer Price Index for April is being closely watched by economists and has the potential to be a significant market mover.

Daily Market Update 5/12/08

Mortgage rates were unchanged to slightly higher Monday morning with no major economic reports due out today. The remainder of the week will be active beginning with tomorrow's scheduled release of Retail Sales data for April, followed by the Consumer Price Index (CPI) on Wednesday.

Daily Market Update 5/9/08

Mortgage rates inched lower Friday as stocks tumbled on news of soaring oil prices, which hit a new record high of $126 per barrel. Oil prices have nearly doubled since last summer. The impact of higher oil prices on mortgage markets is yet to be determined. Inflationary pressures have been mounting as a result of higher energy costs in recent months. Higher inflation typically pushes interest rates higher, but the spike in prices at the pump is also likely to slow economic activity, which serves to hold inflation in check, creating a counter-balance. Major economic data to be released next week include Tuesday's Retail Sales report and Wednesday's Consumer Price Index, both seen as potential market movers. Industrial Production will come out Thursday, with Housing Starts and Consumer Sentiment rounding out the week on Friday.

Daily Market Update 5/8/08

Rates moved lower Thursday reflecting market improvement late Wednesday. Weekly jobless claims came in at 365,000, beating expectations. The Bank of England and the European Central Bank both held rates steady as expected, noting renewed inflationary pressures. No other economic data will be released today.

Daily Market Update 5/7/08

Rates were little changed this morning as first quarter Productivity rose a better than expected 2.2%. The National Association of Realtors reported a 1% decline in pending home sales for March from February, but a 20.1% decline from the same period last year. Oil prices continued rising above $122 a barrel and the Dollar strengthened. No other major economic reports are due out this week.

Daily Market Update 5/6/08

Mortgage rates were unchanged to slightly lower Tuesday as stock prices dropped in the wake of Fannie Mae's reported first quarter loss of $2.2 Billion and record high oil prices. Fannie announced plans to cut dividends and raise $6 Billion in new capital; their stock plunged 6% on the news. Meanwhile, Fed Chairman Ben Bernanke urged Congress to take action to reduce foreclosures in an effort to stabilize the real estate market.

Daily Market Update 5/5/08

Mortgage rates were little changed Monday following the ISM Services Index report showing surprising growth for April in the services sector of the economy. Modest upward pressure on rates resulted from a weaker Dollar and a rise in crude oil prices as Nigerian rebels attacked oil wells and pipelines over the weekend. The remainder of this week's economic calendar will be light with the exception of Wednesday's release of the April Productivity Report and Pending Home Sales Index.

Daily Market Update 5/2/08

Mortgage rates inched higher Friday as employment numbers beat expectations. The Report showed a net loss of 20,000 jobs in April, far better than the forecast loss of 75,000. The unemployment rate dipped to 5.0%. Rates improved slightly for the week following the Fed's 1/4% rate cut and their statement indicating concerns over rising inflation. Analysts are expecting the Fed to hold rates steady for the time being until they are able to fully assess the impact of previous cuts and the economic stimulus package checks currently being distributed.

Daily Market Update 5/1/08

Interest rates moved lower Thursday as investors continued analyzing yesterday's statement by the Fed. Most economists interpret the remarks to indicate a recognition of increasing inflationary pressures and a renewed emphasis on price stability. In other news, weekly jobless claims jumped to 380,000, well above forecast, and oil prices continued falling. Focus now turns to tomorrow's Employment Report for April. Weak data could provide room for further improvement in mortgage rates. The market will likely remain volatile until after the release, scheduled for 8:30 AM.

Daily Market Update 4/30/08

Mortgage rates were unchanged Wednesday morning following the release of preliminary Gross Domestic Product figures and ahead of this afternoon's policy decision by the Fed. First quarter GDP showed economic growth of 0.6%, matching fourth quarter figures for 2007, and largely in line with expectations. While basically flat, the economy may not technically be in recession, and is certainly showing more resiliency than some forecasters had predicted. All eyes are now on the Fed, whose announcement is scheduled for 2:15 PM.

Daily Market Update 4/29/08

Mortgage rates drifted lower ahead of tomorrow's interest rate policy decision by the Federal Reserve. Most economists predict a 1/4% cut in the Fed Funds Rate to 2%. The accompanying statement issued by the Fed concerning future rate bias is likely to have a greater impact on mortgage rates than the much-anticipated move itself. The initial reading of first quarter GDP will also be released Wednesday. Negative GDP growth would provide a strong indication of economic recession.

Daily Market Update 4/28/08

Mortgage rates were mostly unchanged Monday in advance of Wednesday's Fed meeting and Friday's release of the April Employment Report. Other major economic news for the week include the initial report on first quarter Gross Domestic Product (GDP) to be released Wednesday and the Fed's preferred inflation indicator, the Core PCE price index, scheduled for release Thursday. The Fed's policy decision and each of these three reports have the potential to move the market significantly in what is likely to be a volatile week for interest rates.

Daily Market Update 4/25/08

Mortgage rates inched higher Friday as investors await next week's meeting of the Federal Open Market Committee. Economists are forecasting an 80% chance of 1/4% reduction in the Fed Funds Rate and a 20% chance of no change. Ironically, the majority of consumers might be better off if the Fed holds rates steady, turning their focus instead to inflation. Rising food and energy prices have had a profound impact on many Americans in recent months. Aggressive rate cuts by the Fed have contributed to these higher costs by weakening the US Dollar. The first round of economic stimulus package checks begin going out Monday, further fueling inflationary concerns. Meanwhile, the Dollar strengthened this week against the Euro on signs the worst of the credit crisis may be over in the US, while European economies have been struggling.

Daily Market Update 4/24/08

Mortgage rates moved moderately higher Thursday as Weekly Jobless Claims came in lower than expected at 342,000. Separately, Durable Goods Orders for March posted their third consecutive monthly decline, increasing the likelihood of recession. New home sales fell to their lowest level since October 1991. Oil prices were lower and the Dollar gained strength on expectations the Fed may soon end their cycle of rate cuts.

Daily Market Update 4/23/08

Interest rates came under pressure Wednesday morning as skyrocketing oil prices renewed inflationary fears. Concerns mounted over next week's anticipated 1/4% cut in the Fed Funds Rate and its resulting impact on the value of the US Dollar versus foreign currencies. The weak Dollar has contributed to higher food and energy prices in recent months. No economic data will be released today.

Daily Market Update 4/22/08

Rates were mostly unchanged Tuesday morning as existing home sales for March came in on target with expectations. No other major economic reports are scheduled for release today. Investors' focus now turns to Thursday's release of Durable Goods Orders for March.

Daily Market Update 4/21/08

Mortgage rates improved Monday following a dramatic turnaround in investor sentiment Friday afternoon. Investors reacted favorably to indications the Federal Reserve Board has become increasingly concerned over the rate of inflation in recent weeks. Most economists now believe the Fed will lower the Fed Funds Rate to 2% from 2.25% at their next FOMC Meeting April 30th, afterwhich their focus will switch to price stability.

Daily Market Update 4/18/08

Mortgage rates continued their upward trend Friday morning as stocks rallied. The Dow Jones Industrial Average was up over 200 points, more than 500 for the week. Two factors have weighed heavily on interest rates in recent days: inflationary concerns and investor sentiment. Tuesday's release of the Producer Price Index showing the second largest monthly increase in 33 years, Wednesday's release of the Consumer Price Index providing further evidence of inflation, and hawkish comments by members of the Board of Governors of the Federal Reserve all played a role. Adding to the upward pressure on rates was a shift in investor sentiment toward riskier assets. Investors are more comfortable that the worst of the credit crisis has passed, resulting in more funds being directed into stocks and away from bonds and mortgage-backed securities. This combination of events has pushed mortgage rates about 1/2% higher for the week. If, in fact, the worst is behind us and the Federal Reserve is able to stop lowering short term interest rates and focus on inflation, the US Dollar will likely strengthen against foreign currencies, easing oil prices and ultimately paving the way for lower long term fixed rates in coming months.