Rate Update January 15, 2009

Fixed mortgage rates are unchanged this morning…again.  

 Mortgage Bonds are currently trading sideways on the day, even after all the economic news being reported earlier this morning.  Initial jobless claims rose $54,000 last week to 524,000 total.  Although the 4 week average figure is down just a bit, we are still 55% higher now, than this time a year ago.  This new seems pretty obvious in this economy and hasn’t spurred any trading one way of the other on the Bond front.

 Inflation data has revealed that on the wholesale level, things are dropping like a brick.  This is good news for bonds but it will be interesting to see how inflation figures look on the consumer side, when the Consumer Price Index is reported tomorrow.  Remember that lower inflationary concerns are good for mortgage rates because lenders know they will be getting paid back with money that is worth more than it would if the value of the dollar was decreasing at a higher rate over time. 

 As we remain in the wide trading range, and still quite far away from highs we saw in the previous weeks, we will continue to take a floating stance for the long term.

 Outlook: Cautiously Floating