Weekly Mortgage Rate Commentary

Last week was another volatile one for the mortgage market. Mortgage rates marched higher for much of the week as investors continued to be hesitant about even good-quality, mortgage-backed investments. Existing and new home sales numbers again revealed that the bottom has yet to be found for the struggling housing market. Fed Chair Bernanke's comments last week regarding the Fed's increasing willingness to provide economic stimulus, and an unrevised GDP should provide some downward pressure on rates as we start the first week of March. By the end of the week fixed mortgage rates began to see some improvement ending up slightly lower.

This week will probably be another bumpy week for mortgage rates, with some very important data due. The week starts with expectations of a below-50 ISM Manufacturing Index. If the reading drops below 48.5, we could see rates reverse much of last week's climb. The week ends with an extremely important monthly employment report. After last month's net loss of jobs, another loss of jobs would very likely drive mortgage rates downward. Add in an increase in the unemployment rate, and all interest rates are likely to end the week, and start the following week, on a downward trajectory.

Paul Cantor is a mortgage planner at TrustMor Mortgage Co., in Richmond, VA. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com