Monday Market Commentary: Mortgage Rates Still Teasing 2008 Lows

by Alex Stenback on December 8, 2008

Last Week
Rates for thirty year fixed mortgages continue to hover in the sub 5.5% range, though we are seeing a good bit of volatility within a narrow band. Rates generally ping between 5.125% and 5.5% on a daily (if not several times daily) basis.

If you have not yet noticed, these are some of the best rates we’ve seen all year, and really, since 2003.

Last week was also noteworthy in that the Media was awash in stories touting a proposal from the homebuilding and real estate lobbyists advocating for 4.5% mortgage rates in addition to other stimulus aimed at supporting the real estate market.  See our full post on the topic here, but thus far any further action or direct intervention in real estate and interest rate markets does not appear imminent.

This Week
For the first three days of the week, the economic calendar offers little data to the markets.  Without hard data to digest, the interest rate markets will be taking cues from other sources:  Stocks.  Not one but three scheduled public comments/speeches by Fed officials.  The ongoing negotiations over the fate of Detroit. Etc. Etc.

Starting on Thursday, a string of potentially high impact reports are scheduled for release.

Weekly Jobless claims and trade balance data (both only moderately important) print on Thursday AM.

Friday, we get a read on inflation (Producer Price Index. 8.30A), the retail sector (RetailSales, 8.30A), and consumer confidence (UofM Consumer Sentiment Index, 8.30A.)

We expect most of the above data to confirm an economy in retreat, and while that sort of thing is normally helpful to mortgage rates, it may take another major economic event, or the announcement of another initiative aimed at lowering rates, to move mortgage rates lower.
This Week’s Economic Calendar [Barron's]

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