Rate Update July 20, 2009

Back on July 7th I outlined the importance of watching the stock market in determining the direction of mortgage rates as we entered into the 2nd-quarter earnings season.  Last week positive sentiment from Goldman Sachs, Intel, and Google as well as better than expected housing data helped the Dow Jones Industrial Average rise by almost 600 points.  As we would expect, mortgage rates rose by approximately .25%.

Working against mortgage rates this morning is news out of the WSJ that CIT group has temporarily secured funding to keep them out of bankruptcy.  Later today the index of Leading Economic Indicators will be released.  Should this report be better than expected rates would likely move higher.

Later in the week we get Wells Fargo earnings on Wednesday & existing home sales on Thursday.  The momentum in the market suggests that locking is the best policy right now.

Other notable earnings reports due out this week:
*American Express

Current Outlook: bias towards locking