Monday Market Commentary: Mortgage Rates Improve Slightly on Friendly Inflation Number

by Alex Stenback on April 23, 2007

                                                                 Graphic via MSNBC
Last Week
Mortgage rates saw some improvement for the first time in a number of weeks after a better-than-expected print from the Consumer Price Index, which fell to 2.5% from last months 2.7%.  To recap: Any data showing tame, falling, or non-existent inflation will help move rates down.
This Week
A full economic calendar this week, but it holds in store mainly second tier reports that don’t normally move interest rates unless the results are truly surprises.  Existing and New Home sales print Wednesday to provide a snapshot of the housing market.  A smattering of GDP data will hit the wire Friday – signs of economic strength could move rates up, while economic weakness may push them down.

Full Economic Calendar After the Jump


{ 3 comments… read them below or add one }

Hank April 23, 2007 at 7:45 pm

Since ‘market prices’ are being set by speculators using Option ARMs, what’s the point?

Editor April 24, 2007 at 6:51 am

Hank – I am not sure what relevance your comment has regarding this particular post – were we making a point about the real estate market, or are you just trolling?

Hank April 27, 2007 at 6:54 am

No trolling here. There’s a lot of stories the last few years of potential home-buyers with traditional 30-year fixed, 2.8-3.0 times income qualification being “outbid” for houses/condos by people whose loan was a 7-times-income Option ARM balloon where the “teaser” payment took 40% of take-home pay.

The Star Tribune and Pioneer Press have many stories now about rising foreclosures, due to these balloon loans ‘resetting’.

For 3-4 years now, the residential market has been driven by lending “terms”, i.e., the availability of exotic mortgage products.

While I am a firm believer in “traditional” lending terms, in this exotic loan environment quoting Fannie/Freddie rates seems a bit ‘quaint’, maybe even irrelevant.

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