Rate Update October 17, 2008

Mortgage rates have improved again this morning.

Bad news for the economy is typically good news for mortgage rates and that is what we’re experiencing this morning.  The Commerce Department reported worse than expected housing starts for the months of July, August, and September.  Housing starts in September hit the lowest level since January of 1991.

On this news stocks are trading lower which is helping to support mortgage-backed bond prices.  For now we’ll continue to float in the hopes that rates will continue to move lower.  However, the rally on the part of mortgage-backed bonds may be running out of steam.

Current outlook: floating