Rate Update September 3, 2009

Mortgage rates are slightly lower this morning.

Mortgage rates have dropped by approximately .375% since the beginning of August.  Although momentum is on our side we are going to shift our outlook to a “locking bias” for the following two reasons:

*At 11AM EST the US Treasury will announce their auction schedule for next week.  This announcement has put pressure on mortgage rates in the past and we feel it could again today.

*Second, tomorrow brings the monthly employment report.  Even if this report doesn’t beat analysts’ expectations, which would likely cause rates to rise, traders may be looking for any excuse to sell mortgage-backed bonds because of the current lofty levels.

Current outlook: locking bias