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.