Mortgage rates stayed mostly flat to slightly higher last week as the markets essentially went into a holding pattern awaiting news on a government rescue plan for the financial industry.
Meanwhile, WAMU failed, Goldman Sachs got a huge (and expensive) infusion of cash, and Morgan Stanley did the same via Mitsubishi. All of which failed to stabilize the financial markets.
Most mortgage rates deteriorated by .125% by Friday.
Now that there is a plan, it remains to be seen whether the plan itself (update: if it passes, which it didn’t) will be well-received by the markets. Any broad sellof in stocks, or more fear driven flight to quality by investors, could help mortgage rates improve. Accordingly, rescue/bailout related news will dominate the markets this week.
As for the economic calendar, which still bears watching:
- Today’s (August) Personal Consumption Expenditure index showed a consumer in retreat on the spending side, though the income pictured improved somewhat.
- Chicago Purchasing Mangers Index (PMI) will give a read on the manufacturing sector.
- Friday’s payroll report: Will give us unemployment and payrolls data for September – a poor showing here could help mortgage rates.