12/23/09

Good morning. So, how glad are you that you don’t live in the Midwest or East Coast? Tuesday was another tough day for mortgage rates due to a lack of buyers. Analysts brought up the fact that mortgage securities are somewhat expensive relative to risk-free Treasury securities and once again wondered what will happen if the Fed buying program comes to an end.
Maybe here today, after 3 days of higher rates, we’ll see a change. We’ve already had some decent numbers from Personal Income and Consumption. Incomes here in the US saw their biggest gain in six months, and consumer spending rose .5% (expected +.6%) for a second straight month in November. At 10AM EST we’ll see New Home Sales, and the University of Michigan survey, and later today we’ll find out how much the government is selling next week in their 2, 5, and 7-yr Treasury auctions. Right now mortgage rates are unchanged from late yesterday afternoon.