Ian Bennett's Mortgage Blog
Market Update
Monday October 20th 2008

This Morning

Mortgage backed securities (MBS) have opened somewhat higher this morning. Remember, as MBS’s go up in price, they go down in yield which equates to lower rates on mortgages.

Light Week for Economic Data

In contrast to last week, economic data is light this week. There are very little market movers this week. MBS’s will most likely driven by the stock market and national head lines.

This past week we had a strong finish with MBS picking up a lot of buying action improving by over 1 basis point in discount. This equates to about .25% to .375% lower mortgage rates then earlier in the week.

Based on the trends, it appears that we are trending towards lower rates. We have a slowing economy, lower inflation, spreads between treasuries and mbs remain at historic high levels, the rescue money still hasn’t found its way into the system and rates tend to be lower in the winter which has proven to be accurate 8 out of the last 10 years.

This week brings us the release of 3 economic reports which might have some impact on mortgage rates.

Monday

The composite index of leading indicators, which measures the strength of the economy. Economists are expecting a -.3% reading after last months -.5% reading. This report will be released at 9 eastern time and will more then likely be over looked as most investors already have a good feel for the strength of the economy. Click to view the updated data

Thursday

Jobless claims will be the only report released. Economists are expecting 465,000 first time claims after last months 461,000 reading.

Friday

Existing Home Sales, economists are expecting a 4.93 million after last months 4.91 million.

I am committed to your education on the housing markets and the mortgage industry. If you have any topics you are interested in please let me know. Feel free to forward the link to my blog along to your clients, family, friends, and coworkers. I hope you enjoyed your weekend. Make sure to check back here for updates.


Cheers,

Ian R Bennett

Mortgage Banker