Rate Update May 22, 2008

As oil prices continue to hit new record highs inflation concerns are again weighing on bond prices which is pushing rates higher. In yesterday’s rate update we said:

“However, we remain concerned that continued inflation concerns will drag bond prices below these levels pushing rates higher.”

Unfortunately we are going to shift our outlook to locking. The last few times that mortgage-backed bonds have been pushed below technical layers of support they’ve moved sharply lower over the course of 2-3 trading days. For now we recommend locking in.

Current Outlook: locking