My New Blog

As the stock market fell to five-year lows during the week, investors
moved to less risky investments. Treasury markets were the primary
beneficiary of the flight to safety, and Treasury yields reached the
lowest levels in decades. Mortgage rates fell during the week as well,
but to a much lesser extent.

The news during the week on inflation pointed to lower future levels.
The October Consumer Price Index (CPI) inflation report showed a large
monthly decline in the overall index due to lower oil prices. The core
rate, which excludes food and energy, saw its first monthly decline in
over 25 years, and the annual rate fell to 2.2% from 2.5% in September.
Oil prices have continued to move even lower this month, which will be
reflected in the November data. Lower expected inflation is almost
always a good thing for mortgage rates.

In the housing sector, October Housing Starts fell to a record low, and
Building Permits, a leading indicator, fell 12%. These were weak
numbers, but a decline in new home building will reduce the number of
unsold homes on the market, which should help to stabilize home prices
sooner. The recent decline in home prices has one bright spot. Combined
with relatively low mortgage rates, homes have reached their highest
level of affordability in four years, according to the National
Association of Home Builders (NAHB). The NAHB index compares the cost of
paying for a home, based on average home prices and mortgage rates, to
the median household income. Increased affordability allows more people
to participate in the housing market and should boost demand.

A lot of economic data will come out during the short week ahead.
Existing Home Sales will be released on Monday. The first revision to
third quarter Gross Domestic Product (GDP) will come out on Tuesday. GDP
is the broadest measure of economic growth. Wednesday will be a huge day
with Durable Orders, Chicago PMI, Personal Income, and New Home Sales.
Consumer Confidence and Consumer Sentiment are also on the schedule for
next week. Mortgage markets will be closed on Thursday and will close
early on Wednesday and Friday for Thanksgiving.

Copyright @ 2008 MBSQuoteline

Sending you all warm wishes and hope you had a wonderful Thanksgiving.

Christina