10/6/09

In the markets, yesterday was a relatively quiet day. Rates are still low, and the stock market improved somewhat, which tends to make the US populace feel a little better about things. In fact, in spite of the profit margins, interest rates for 30-year fixed-rate mortgages are near last May’s levels. And 15-yr rates, where interestingly enough the principal portion of the early payments is about half of the total P&I, are the lowest in decades. So these rates, combined with the potential end of the $8,000 tax credit and some great pricing, are certainly helping to stabilize home sales. New home sales are the highest they’ve been in a year, and inventories are the lowest they’ve been in decades. One cloud on the horizon, as it always is, is this week's Treasury auction. Or, put another way, with the supply this week don’t look for a big drop in rates unless the stock markets continue their downward path, which may be unlikely. Today mortgage security prices are about unchanged.