Weekly Mortgage Market Report

February 1, 2010

US Economy Points to Good Housing Market:
We have had very strong housing markets with 30 year fixed mortgage rates in the 7's and very poor housing markets with mortgage rates below 5. Regardless of interest rates, tax credits, or home prices, the number one factor that determines the level of demand for housing is Consumer Confidence. When consumers feel good about their future they are simply more likely to purchase a home.

So, it is great news when the Reuters/University of Michigan's Consumer Confidence readings hit their best levels since January 2008. The reading was 74.4 and showed "that consumers are convinced that the worst is over".

Consumers are not alone in their sentiment. The GDP for the 4th quarter was just released and it showed that our economy grew at a blistering rate of 5.7%. Which was more than double the 3rd quarter level of 2.2%. This was the best GDP numbers in more than six years.

What Happened to Rates Last Week:


Mortgage backed Securities rose +26BPS last week helping to lower 30 year fixed mortgage rates slightly. We had another roller coaster week. Our worst pricing and rates were on Wednesday after the FOMC meeting. But we bounced backed and ended the week on a good note on the weakness of the DOW.

What to watch out for this week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect mortgage rates.



 

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