200760 Resource 178438 178984 178982 1206984348352 1206988870280 Controlled Economic Influences and Rate Expectations

What is happening in the Home Mortgage Market?

Last Week In Review… "NO GREAT DISCOVERY WAS EVER MADE WITHOUT A BOLD GUESS." Isaac Newton But even the great mind of Isaac Newton might not have guessed that Bonds and home loan rates would continue on such a volatile course. But let's get bold, and discover what caused the latest rock and roll action in the financial markets, and take a look at what the coming week might have in store.Forces were certainly at work to keep the financial markets from being at rest, starting bright and early last Monday morning. The headlines brought a quick shot in the arm for Stocks, as beleaguered Bear Stearns is now expected to see $10 per share in their buyout, rather than the previously expected $2 per share. Great news for the troubled financial sector at large, but Bonds got battered hard, as money flowed out of Bonds and into Stocks - causing home loan rates to rise.But as the week progressed, some dismal news played out, including a plunge in Consumer Confidence and mixed news on the housing market, which pulled the money right back out of Stocks, and into the safe haven of Bonds...helping home loan rates improve again. But like <city /><place />Newton</place /></city />'s famous third law of motion, "every action has an equal and opposite reaction" - Bonds and home loan rates changed course again, on better than expected unemployment claims on Thursday.Then Friday brought the discovery that Core inflation is perhaps not as hot as previously thought. The highly watched year-over-year core inflation rate was reported at just 2%, as measured by the Fed's favored Personal Consumption Expenditure Index (PCE), and within the bounds of what the Fed would like to see for core inflation. Since inflation is the arch enemy of fixed return Bonds and home loan rates...this news was good indeed, and caused home loan rates to improve once again. Once the dust settled for the week, home loan rates ended up near where they began, before their weekly roller coaster ride.Forecast For The Week…  The Bond market will gravitate towards news from the job market this week, with employment information due to arrive on Wednesday and Friday. Although Wednesday's ADP Employment Report has a history of being somewhat unreliable in predicting the "official" Jobs Report number, Bond traders will still try to use it to predict what the Department of Labor's report will show on Friday. And this week, the estimates are negative - meaning no job creations are expected, net job losses are what is anticipated - so any positive reads could be good news for Stocks, but bad news for Bonds and home loan rates. So...surprise, surprise...more volatility for Bonds and home loan rates is likely in store, between the ADP Report release on Wednesday, and the arrival of the Jobs Report on Friday morning.Remembering that when Bond prices move higher, home loan rates move lower. While Bonds and home loan rates could react to early week news of housing and manufacturing, the employment news will definitely be the talk of the week, and any surprises will likely cause a swift reaction.<shapetype id="_x0000_t75" coordsize="21600,21600" o:spt="75" o:preferrelative="t" path="m@4@5l@4@11@9@11@9@5xe" filled="f" stroked="f" /><stroke joinstyle="miter" /><formulas /><f eqn="if lineDrawn pixelLineWidth 0" /><f eqn="sum @0 1 0" /><f eqn="sum 0 0 @1" /><f eqn="prod @2 1 2" /><f eqn="prod @3 21600 pixelWidth" /><f eqn="prod @3 21600 pixelHeight" /><f eqn="sum @0 0 1" /><f eqn="prod @6 1 2" /><f eqn="prod @7 21600 pixelWidth" /><f eqn="sum @8 21600 0" /><f eqn="prod @7 21600 pixelHeight" /><f eqn="sum @10 21600 0" /></formulas /><path o:extrusionok="f" gradientshapeok="t" o:connecttype="rect" /><lock v:ext="edit" aspectratio="t" /></shapetype /><shape id="_x0000_i1025" style="WIDTH: 195pt; HEIGHT: 134.4pt" type="#_x0000_t75" alt="Japanese Candlestick Chart" /><imagedata src="file:///C:\DOCUME~1\EFONTA~1\LOCALS~1\Temp\msohtml1\01\clip_image001.png" o:href="http://www.mmgweekly.com/templates/mmgweekly/reg_chart/135/images/fnma03292008.gif" /></shape /> 10 application/xml false home loan rates mortgage market mortgage rates Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727; .NET CLR 3.0.04506.30; .NET CLR 3.0.04506.648) 127.0.0.1 127.0.0.1 aheitland 75.160.24.218 false true false false true 178975 false false true false false false true 178438 blog blogsite/BestFlagstaffHomes/web