Rate Update August 24, 2010

Mortgage rates are better this morning.

Stocks are trading lower, helping mortgage rates, on weak existing homes sales for July.  The National Association of Realtors reported this morning that existing home fell to the lowest level in 15 years last month.  However, overlooked in the report is the fact that July is almost always the highest inventory month of the year AND median home prices actually rose by .7%.

Also pushing yields lower this morning is comments out of the UK by a Bank of England official who stated that a double-dip recession is a significant risk.  This has spooked equity investors into chasing relatively “safe” outlets for their capital.

Each of the past two days the stock market has reversed course mid-day.  If this happens today it may be a good idea to lock.  For now, I’ll shift to floating position.

Tomorrow brings the durable goods orders report and new home sales.

Current outlook: floating