Rate Update for August 7, 2008

Rates are modestly higher this morning following.

After four straight days of sell-off in the mortgage-backed bond market, which has caused mortgage rates to rise by approximately .25%, we may begin to see a reversal.

Potentially helping rates is a weaker stock market (to understand dynamic between stocks and mortgage rates click here).  The Dow Jones Industrial Average is currently trading over 100 points lower after a slew of financial firms reported worse than expected quarterly losses (Freddie Mac, Axa, Barclay’s, & AIG).

In real estate news, zillow.com reported results from a recent survey they did of homeowner’s that had interesting results.  Their 2nd quarter survey showed that out of 1,361 homeowners 62% said they believed the value of their home increased over the previous year.  However, according to zillow.com data 77% of homes in the US depreciated.  This unusual optimism may help explain why obtaining price reductions from home sellers can be difficult.

For now we will recommend a neutral position with a floating bias.

Current Outlook: neutral with floating bias

The views and opinions expressed in this site are those of the author(s) and do not necessarily reflect the official policy or position of Cherry Creek Mortgage Co., Inc. This is for informational purposes only. This is not a commitment to lend.