Rate Update May 6, 2008

A disappointing earnings report out of Fannie Mae is pressuring stocks lower this morning. This weakness is helping to support mortgage-backed bonds prices right at an important technical layer of support. If bonds can rally off this support level it would be a welcome sign for mortgage rates.

Working against interest rates is the ever-increasing price of oil. The price for a barrel of oil has hit $120 and one Goldman Sachs analyst believes it could go as high as $150-$200 over the next 12 months. This would certainly have inflationary impacts on our economy that would likely cause rates to rise.

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.