Weekly Mortgage Newsletter

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Continued reminders of the poor state of the housing market helped push mortgage rates downward
Week of slightly last week. While both Housing Starts and Existing Home Sales posted increases, their levels
April 24, are still woefully low, and until more jobs are created, unlikely to rise quickly.
2011 This week is a very busy week for financial markets. With more and more focus on inflation in the
last few weeks, many analysts will be carefully reading the Fed’s Policy Announcement. While no
one is expecting the Fed to change rates, markets could react if the Fed expresses more than a passing
Mortgage acknowledgement of slowly growing price pressures. If the Fed shows even more concern, then rates
Market are likely to move upward. However, if the Fed does not mention inflationary pressures, rates might
Commentary trend downward just slightly again. We’ll also get a good look at consumer moods with both
Consumer Confidence and Sentiment due this week. Combined with the 1st estimate of last quarter’s
GDP, we could see rates moving back up with any signs of unexpected strength in the economy.
This Week’s Top Economic Reports and Events 30Yr 15Yr 1Yr ARM

Mortgage Rates
Report/Event Date Prior Est. Impact
New Home Sales 4/25 250K 280K Limited 5.00%

After last week’s meager housing news, another small increase in new 4.50%
sales will likely only put a tiny amount of upward pressure on rates. 4.00%
Consumer Confidence 4/26 63.4 64.4 Significant 3.50%
Battered by rising gas prices, we might see Confidence slipping, but 3.00%
mortgage rates would then benefit from some downward pressure. 2/3 2/17 3/3 3/17 3/31 4/14
12,750.00
FOMC Policy Announcement 4/27 Significant
12,500.00
Dow Jones

Inflation is the key to this announcement. The more the Fed expresses
concern about price pressures, the more likely rates are to increase. 12,250.00

Gross Domestic Product (Adv) 4/28 3.1% 1.7% Significant 12,000.00

A few analysts are expecting a surprise GDP closer to 2.5%. If this 11,750.00

comes to pass, rates are likely to feel some upward pressure. 11,500.00
27-Jan 10-Feb 24-Feb 10-Mar 24-Mar 7-Apr 21-Apr
U of Mich. Consumer Sentiment 4/29 69.6 69.6 Moderate
9.00
If both Confidence and Sentiment reveal decreasing consumer moods,
Historical Rates

then mortgage rates will experience some additional downward pressure. 6.00

Mortgage Rate Interest Rates and Indexes

3.00
Trends 1 Yr T-Bill 0.240% 11th D. COFI 1.469%
Short-Term ÎÎ 10 Yr T-Note 3.510% COSI 2.220% 0.00
Apr-06 Apr-07 Apr-08 Apr-09 Apr-10
Long-Term ÎÎ 6 Month Libor 0.433% CODI 0.331% 1 Yr CMT MTA COFI
CODI Prime
Volatility High Prime Rate 3.250% MTA 0.295%
10 Year Treasury Note Trend
3.75
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