Monday Market Commentary

by Alex Stenback on August 21, 2006

Mortgage_rate_060817gifhmedium
                                                     Graphic Courtesy of MSNBC

Last Week

Rates slipped again last week after both CPI (consumer price index) and PPI (producer price index) settled the markets fears over inflation, at least for the short term.  Combine that with further evidence of a slowing economy, and the markets have taken rates to their lowest level since April.
This Week
We’ve got a number of treasury auctions, and a smattering of mostly second tier reports to wade through.  Most notable be durable goods orders, which print Thursday. Of course, Fed Chair Bernanke speaks on Friday, which always has the potential to roil the markets.
· This Week’s Economic Calendar [barrons.com]

{ 3 comments… read them below or add one }

Chuck August 22, 2006 at 6:58 am

With so many people buying real estate using ‘exotic’ loans, interest-only & negative amortization, what’s the use of quoting the 30-year fixed rate?

People have chosen the exotic loans rather than fixed-rate loans in order to – temporarily – get a monthly payment that they can make.

Editor August 22, 2006 at 8:26 am

Fairly simple, really – the thirty year fixed, in addition to being the mortgage product that the majority of hoemowners select, also acts as a bellweather indicator of the prevailing interest rate environment.

Keeping in mind the chart’s above never represent the current rates, but are only a snapshot of recent activity.

Chuck August 26, 2006 at 8:37 am

Alex, can you comment from a ‘local perspective’ on the study by First American Real Estate :

http://www.firstamres.com/pressrelease?page=detail&id=77

“The states with the highest percentage of risky properties, where fewer borrowers have significant equity and face greater likelihood of experiencing reset sensitivity include Tennessee, Colorado, Minnesota, Alabama and Arkansas.”

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