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.

Daily Market Update 4/17/08

Mortgage rates remained unchanged this morning after rising sharply the past two days. Traders are now betting the Federal Reserve will stop cutting interest rates after a 1/4% reduction in the Federal Funds Rate on April 30th. Growing concerns over inflation are seen as limiting the Fed's ability to stimulate the economy through lower interest rates. Paradoxically, a firmer stance against inflation may help strengthen the US Dollar against foreign currencies, helping push down oil prices and long term interest rates.

Afternoon Update 4/16/08

Mortgage rates moved higher Wednesday afternoon as inflationary concerns mounted, led by rising food and energy prices. The surge has been fueled by weakness in the US Dollar, increased worldwide demand, and increased production of gasoline-alternative ethanol.

Daily Market Update 4/16/08

Mortgage rates were largely unchanged today as the Consumer Price Index came in on target with expectations. Inflation remains a concern for investors as the Dollar hit new lows against the Euro and crude oil jumped to nearly $115 a barrel. These developments may limit the Federal Reserve's ability to continue cutting short term rates as aggressively as it has in recent months.

Daily Market Update 4/15/08

Mortgage rates rose following release of the Producer Price Index for March showing the second largest monthly increase in three decades at 1.1%. Tomorrow's release of the Consumer Price Index becomes even more significant in the wake of today's numbers, as investors will be looking for further signals of inflation.

Daily Market Update 4/14/08

Mortgage rates were little changed today as retail sales came in close to expectations. Potential market movers this week include the Producer Price Index and the Consumer Price Index scheduled for release Tuesday and Wednesday, respectively. Core rates exceeding 0.2% for either index will fuel inflationary concerns and likely push rates modestly higher.

Daily Market Update 4/11/2008

The 30 year fixed FNMA required net yield (60 day) is now at 5.62%. Stock market declines have boosted mortgage markets this morning, and the Dow is down about 120 points. March Import Prices ex-oil rose 1.1% from February.

Daily Market Update 4/10/2008

Favorable repricing took place yesterday. The 30 year fixed FNMA required net yield (60 day) is now at 5.57%, the lowest level of the month. The stock market is nearly unchanged, and it has been a quiet morning. Today's economic news had little impact.

Daily Market Update 4/9/2008

The 30 year fixed FNMA required net yield (60 day) is now at 5.69%. No economic data will be released today, and the stock market is nearly unchanged. A couple of Fed speakers may be the best shot for market moving news.

Daily Market Update 4/8/2008

The Dow is down about 60 points. February Pending Home Sales fell 1.9% from January, a little more than expected, and they are down -21% from one year ago. They are a leading indicator for housing market activity. Later, the FOMC minutes from March 18 Feb meeting will be released at 2:00 et.

Daily Market Update 4/4/08

Interest rates moved lower on the heals of this morning's release of the Employment Report. The economy lost 80,000 jobs in March, the worst monthly results in five years. Wages rose at a 3.6% annual rate, in line with expectations. Today's data shows strong evidence of economic contraction in the First Quarter of 2008, increasing the likelihood of further rate cuts by the Fed in coming months.

Daily Market Update 4/3/08

Mortgage rates improved this morning as Weekly Jobless Claims jumped to 407,000, the highest level since September 2005. Levels above 400,000 are consistent with a weakening labor market. All eyes are now on tomorrow's release of the Employment Report for March. A poor showing would increase the likelihood of recession and could move rates slightly lower.

Daily Market Update 4/2/08

Mortgage rates were modestly higher today as the market focused on Congressional testimony by Federal Reserve Chairman Ben Bernanke. Analysts interpreted Mr. Bernanke's statements as an indication the pace of Federal Reserve rate cuts would likely slow in coming months. The probablility of a 1/2% reduction in the Fed Funds Rate at the Fed's April 30th policy meeting dropped to 12 percent from 24 percent yesterday, according to futures contracts on the Chicago Board of Trade. The odds of a 1/4% reduction were 88 percent.

Daily Market Update 4/1/08

Mortgage rates were slightly higher today as stocks rallied, attracting investor funds away from mortgage-backed securities. Economic data came in stronger than expected but had little impact. This Friday's unemployment report has potential to be the next big market mover.