Rate Update September 28, 2010
Mortgage rates are better today.
Economic worries have returned to help mortgage rates and hurt stocks.
This morning the Conference Board reported that consumer confidence fell by more than expected in September. Personal consumption makes up a large part of the US economy so when consumers are not confident they are not likely to spend which is not a good indicator for the outlook of the economic recovery.
This morning’s S & P Case-Shiller Home price index showed that home prices continued to grow through June of this year in the 20 major real estate markets that it tracks (including Portland). However, the markets yawned at the news realizing that the results were influenced by the now expired homebuyer tax credit.
Mortgage rates recent dip lower is a result of the expectation that the Fed will engage in further quantitative easing. However, the Fed has yet to explicitly commit to such action so the markets may be operating on false hopes. This morning’s WSJ is reporting that the Fed is likely to act up in a much smaller and gradual scale than is anticipated. For now, the markets will have to speculate.
I will remain in a neutral position.
Current outlook: neutral