Weekly Mortgage Rate Commentary

Weekly Mortgage Rate Commentary - Week of December 30, 2007

After enduring days and weeks on end of extreme market volatility. And Like the many weeks before ;ast week was one of extreme volatility, events in Pakistan brought on even more volatile moves in the markets. There is global concern over the possibility that the Pakistani government may become destabilized - and if this should happen, which political faction may end up in power with control over its nuclear arsenal. This is an example of how unforeseen political events around the world impact domestic mortgage rates. Bond prices moved higher due to the increased demand for a "safe haven". Mortgage note rates improved by about .125% for the week overall.


As, mortgage rates moved little last week and are ending 2007 very near where they started the year. A great deal has happened in the past year. Residential real estate anal the mortgage industry struggled after years of record growth. Credit markets dried up, with many mortgage products disappearing. While many analysts had predicted doom-and-gloom for the economy in 2007, it never materialized. The economy powered through the housing and credit market challenges.

Will 2008 he a year of economic recession and plummeting real estate values, or will housing finally hit bottom and return to pushing the economy forward? While only time will tell, the first economic reports of the year will likely set the tone for the next few weeks. Lf the ISM Index and employment data point to healthy manufacturing and labor markets, we should see mortgage rates remaining stable. However, if the year starts with troubled manufacturing data, or signs of a weakening employment environment, we’ll see mortgage rates declining in anticipation of future Fed rate cuts.