Mortgage Times

[Adam in CO]

Mortgage Market News for the week ending December 28, 2007

Events This Week:

Employment Down
Durable Orders Flat
New Home Sales Fell
Manufacturing Mixed

Events Next Week:
Mon 12/31
Existing Home Sales
Wed 1/2
ISM Manufacturing
FOMC Minutes
Thurs 1/3
Factory Orders
Fri 1/4
Employment
ISM Services

Weakness Seen in Economic Data

Slower economic growth is less inflationary, which is generally positive for mortgage rates. Last week, mortgage investors saw several indications of weaker than expected economic growth and pushed rates a little lower on the news. November Durable Goods orders rose a slim 0.1% from October, far below the consensus forecast for a 2.2% monthly increase. The core capital goods component, a proxy for business investment, was down a surprising -2.6% from one year ago. In addition, weekly Jobless Claims rose, revealing unexpected weakness in the labor market, and November New Home Sales fell far short of economists' estimates.

Thursday's news of the assassination of Pakistani opposition leader Benazir Bhutto shocked investors worldwide and helped to push mortgage rates lower. During periods of economic or geopolitical uncertainty, a flight to safer investments is a common reaction. The response to this news followed the typical pattern, as investors shifted funds out of stocks and into relatively less risky investments such as agency issued mortgage backed securities.

Interestingly, mortgage rates are now at almost exactly the same level as they were one year ago. Mortgage rates rose throughout the first half of 2007 and peaked in June on fears of worldwide inflation from rapid economic growth. They then generally declined for the rest of the year, as the credit crunch led to reduced expectations for future economic growth.

• Also Notable:
• The European Central Bank President warned that the threat of higher inflation would limit rate cuts
• Continued Jobless Claims rose to a 2-year high
• The October Case-Schiller 20-city home price index was 6% lower than one year ago
• Oil prices climbed back up to $97 per barrel, just short of record levels

Average 30 yr fixed rate:
Last week:-0.08%
This week:+0.01%

Stocks (weekly):
Dow:13,344-64
NASDAQ:2,675+2

Week Ahead

Next week will be another short one due to the holidays, but thoughts of days off will be memories when the Employment report brings investors back to financial markets on Friday. As usual, this data on the number of new jobs created, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month, since the health of the labor market is perhaps the single biggest factor in the performance of the economy. Early estimates are for 70,000 net new jobs added in December.

It will be a reasonably busy week before the Employment data as well. Existing Home Sales will come out on Monday, and the ISM National Manufacturing index will be released on Wednesday. The FOMC minutes from the December 11 Fed meeting are also on the schedule for Wednesday. The detailed record of the discussion between Fed officials often provides additional insight into the reasoning behind the Fed statement. ISM Services, Construction Spending, and Factory Orders will round out the Economic Calendar next week. Mortgage markets will close early on Monday and will be closed on Tuesday.

admin@corefinancegroup.com

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Dont sweat the petty things. Pet the sweaty things!

[KenP]

Thanks Adam.

I have an idea to increase the number of views these threads get:

Post new nudies each week of that hot chick you sent to CO's house.