Rate Update September 25, 2008

Pricing on rates is slightly worse this morning.

This morning the Commerce Department reported that durable goods orders fell by 4.5% last month which is far worse than economists had expected. This is not a huge surprise given that durable goods often require financing to purchase and with the credit markets in turmoil credit is harder to come by making durable goods more difficult to purchase.

Ordinarily weak economic data is a positive sign for mortgage rates and a negative sign for stocks. However, stocks are rallying this morning on news that the government is close to passing a financial bailout plan.

Although we expect stocks to rally on the passage of the plan we still feel that rates may move lower in the long-term. As I wrote about on September 12th a spread between 30 year treasury bonds and mortgage-backed bonds still exist.

Current Outlook: near-term locking, long-term floating

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.